(HART MK/SELL/RM7.15/Target: RM5.04)

1QFY18 bottom line rose by a commendable 8% qoq, thanks to contribution from the full capacity ramp-up in Plant 3 and firmer qoq glove ASPs. The time lag in passing on the recent softening of raw materials prices points to a stronger quarter ahead. We raise our FY18-20 net profit forecasts by 4-8% after increasing our ASP assumptions. However, lofty valuations still imply downside risks to share price. Maintain SELL with a higher target price of RM5.04, based on 20x 2018F PE (from 17x).

Source: UOB Kay Hian Research - 9 Aug 2017