KUALA LUMPUR (Dec 15): BIMB Securities Research said the 35 Hartalega Holdings Bhd employees testing positive for Covid-19 will have minimal impact on the group’s earnings.

BIMB analyst Saffa Amanina Mohd Anwar said in a note today that if the number of infected workers does not increase substantially, and the duration of the production line closure is not extended, the impact on the group’s earnings for the financial year ending March 31, 2021 (FY21) would be minimal (under 1%) and, therefore, insignificant at the moment.

Hartalega said yesterday 35 of its employees had tested positive for Covid-19 based on its initiated precautionary mass testing of 8,772 employees.

The group took precautionary action by closing eight production lines for a month, equivalent to a capacity loss of less than 0.5% of total annual output.

Saffa Amanina said she did not make any other adjustment to her forecasts at this point due to the insignificant impact on earnings, pending further details of an upcoming conference call with management.

She also maintained her "buy" call and target price (TP) of RM23.80 for Hartalega based on 30 times price-earnings ratio (PER) pegged at FY22 earnings per share (EPS).

At the time of writing today, Hartalega had risen 14 sen or 1.17% to RM12.10, valuing the company at RM40.99 billion.