Hartalega’s shares actively traded on strong growth outlook by research houses

Kenanga Research has upgraded its recommendation on Hartalega to “Market Perform” from “Underperform” but maintained its target price at RM5.15. — AFP pic
Kenanga Research has upgraded its recommendation on Hartalega to “Market Perform” from “Underperform” but maintained its target price at RM5.15. — AFP pic

KUALA LUMPUR, Feb 13 — Hartalega Holdings Bhd’s shares were actively traded today on strong growth outlook.

At 11.32am, Hartalega shares were down one sen to RM5.44 with 2.39 million shares traded.

Kenanga Research in a research note today said the commissioning of Hartalega’s Plant 5 of the next generation glove complex (NGC) would boost the company’s production capacity and drive earnings growth for financial year 2019.

The research house said Hartalega have commissioned six out of 12 lines of the Plant 5 with the remaining production lines to be commission progressively by end of the first half of 2019.

“Once completed, Plant 5 is expected to boost additional capacity by 14.5 per cent to 37.2 billion pieces per annum,” it said.

RHB Research in a separate note said Hartalega is expected to face a challenging business environment due to increased competitions and cost increases from a higher minimum wage effective Jan 2019.

However, it said the company’s long-term prospects remained optimistic on back of growing demands for gloves, ongoing NGC expansions and potential market share growth of antimicrobial glove (AMG).

Public Investment Bank in another note said following the launch of Hartalega’s AMG, the company has to date received orders from customers in over 10 countries.

“Currently, Hartalega is working on securing US Food and Drug Administration’s (FDA) approval to enter the US market where there is greater awareness among US healthcare professionals on the dangers of healthcare-associated infections. It is targeting to secure the approval by end of 2019,” it added.

Kenanga Research has upgraded its recommendation on Hartalega to “Market Perform” from “Underperform” but maintained its target price at RM5.15.

Meanwhile, the RHB has kept “Buy” call on Hartalega with target price of RM6.18, while Public Investment Bank has maintained “Neutral” view with target price of RM5.63 on the glove manufacturer. — Bernama

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