HARTALEGA HOLDINGS BERHAD (HARTA), established in 1988 is engaged in the production of gloves. The main products of this Group are Latex Gloves and Nitrile Gloves. The company produces examination gloves as well as surgical gloves. Latex Gloves provide high tensile strength and elongation for maximum tear resistance while Nitrile Gloves provide an alternative to latex-sensitive users from proteins that may cause allergic reaction.

Group’s Financial Performance

As shown in Graph 1, the Group’s revenue increased by 30.7% and the profit before tax increased by 14.4%. The increase in revenue is in line with the Group’s continuous expansion in production capacityand increase in demand. According to Graph 2, The NGC project was completed with new 40 production lines with total annual capacity of 14 billion to accommodate the product demand.

Graph 1: Revenue and Profit Before Tax for Hartalega FYE 2016.

(Source: Annual Report 2016)

Graph 2: Hartalega’sNGC Production Plant

(Source: Singapore Yahoo)

Enclosed below with the latest quarter report (Q1, FYE 2017) the Group has released at 02-August-2016 shows slight increase in revenue but reduction on profit before tax. This is due to more competitive sales pricing, increase in raw material, natural, maintenance and staff cost.

Remark: The Group has undergone bonus issue in September 2015 with ratio of 1:1. Hence the EPS of Q1 FYE 2017 is halved of Q1 FYE 2016.

Graph 3: HARTA Quarter Report History

(Source: Malaysiastock.biz )

Majority of the Group’s sale value is denominated in US Dollar (50%) and Europe (30%) as shown in Graph 4. Hence any strengthen of US Dollar and Europe is beneficial to the Group’s bottom line. We also observed on the USD/MYR (refer to Graph 5), any strengthening of USD in second half of year 2016 will increase the revenue of the Group.

Graph 4: Revenue Based on Geographical Location

(Source: Annual Report 2016)

Graph 5: USD/MYR

(Source: XE Chart)

Technical Analysis

The stock price has rebounded from heavy selling at 03-August-2016 @ 4.08.  The stock has a resistance @ 4.49. Any breakout above this level will test another strong resistance level @ 4.81.

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