KUALA LUMPUR, Aug 5 ― CGS-CIMB Securities Sdn Bhd has reiterated 'Add' rating to Hartalega Holdings Bhd with a new target price (TP) of RM24.30 from RM20.00 previously, backed by its industry-leading margins, while benefiting from the current favourable operating environment for glove makers.
In a research note, it said on the back of the current strong global demand, Hartalega has secured orders for all of its capacity up until end March 2021.
In tandem with the ongoing spike in daily new cases of Covid-19 throughout the world, the company expects annual global glove demand to rise more than four times the usual rate (eight to 10 per cent) post-pandemic, mainly driven by higher glove usage, especially from developing countries.
Downside risks for its call include a sharp decline in the Average Selling Price (ASP); discovery of a Covid-19 vaccine; and/ or outbreak of Covid-19 among Hartalega’s workers.
On a similar note, RHB Investment Bank Bhd has maintained its “buy” call and TP of RM21.60 for Hartalega as it expects the second quarter financial year 2021 forecast earnings should improve quarter-on-quarter due to the ASP increases.
Kenanga Research also reiterated its “outperform” rating on the company with the TP raised to RM24.66 from RM22.30 following its solid management, constantly evolving via innovative products development and its booming nitrile gloves segment.
Meanwhile, other research firm such as MIDF Research has maintained a “neutral” call with a revised TP of RM20.73 from RM15.69 previously, Malacca Securities Sdn Bhd maintained “hold” recommendation with a higher TP of RM18.44 (previously RM18.00).
AmBank Research also maintained “hold” recommendation with a higher fair value (FV) of RM18.58 (previously RM16.24). ― Bernama
