Coming QR prospects even without prosperity tax still looks very bearish with increasing wages, depressed ASP price, supply chain disruptions and increasing gloves supply which leads to much lower profit margin
@Sslee harta revenue and net profit are three times of the kossan's revenue and net profit. People are silly enough to use market cap as reference to compare valuation...
So far , price seems to be holding up quite well. Hopefully we get to weather this storm and the stock finally has bottomed. Then normalize again for steady growth....
Harta will drop to rm 2.xx ! Hold longer loss bigger until u bankrupt , really a good value investment with 3 sens dividen at rm 4.xx per share ! Wake up dude !
Revenue is close to RM1B almost similar to last Qr. NP margin 22.5% vs Kossan's recent 13%. So much better result than expected. If not for the huge tax deduction, it would've been impressive!
Price of everything up and up the sky...harta no continuously down and down, luckily not 6ft underground in value, still goin to receive dividend, still grounded in value, neednt queue up at Yayasan Hartalega....
Hartalega still declares 3.5sen dividend. Not bad ah. If one doesn't focus on the large one-sum tax, Harta is doing okay IMO. As long as Harta can maintain good profit margin compared to its competitors, I think it is worth adding more IMO.
Our main competitor (China) is still dealing with the "dynamic-zero" policy. I think we should have a slight advantage in the short run. Since we are back to a new normal, demand and ASP should normalised pretty soon. I don't think glove ASP will fall too much since price are rising across the board. As long as Harta can maintained a decent profit margin, we should see prices slowly moving back to normal (above RM5).
Slow and steady. I put them in the freezer. Can wait for another year or two.
KUALA LUMPUR (May 11): Analysts on Wednesday (May 11) cut their earnings forecasts for Hartalega Holdings Bhd on lower glove average selling prices (ASPs) and sales volume, as well as higher cost.
This was after the group posted its first-ever quarterly loss of RM197.9 million for the fourth quarter ended March 31, 2022 (4QFY22) due to a provision for the Prosperity Tax (Cukai Makmur). This brought its full-year earnings for FY22 to RM3.23 billion.
The results were within most analysts' expectations.
KAF Research analyst Nabil Zainoodin said in a note that he expects the group to return to profitability next quarter as the management had guided that the effective tax rate will be lower than the prevailing corporate tax rate of 24% from next quarter.
“That said, Hartalega's near- to mid-term outlook remains challenging given the intense competition resulting from the oversupplied glove market. The downward pricing pressure in the current environment would make it difficult for the group to fully pass on the rising input cost to customers, which could result in further margin compression,” he said.
Additionally, he said global logistics disruptions and container shipping shortages may continue to affect shipments and possibly may persist for the next few quarters.
Post the full FY22 results release and based on the management's forward guidance, he revised his FY23 and FY24 earnings forecasts for Hartalega downwards by 11% and 3% to RM582.8 million and RM528.3 million respectively.
"We maintain our 'sell' recommendation on Hartalega and revise our target price (TP) to RM3.66 from RM3.80 previously based on 2023 of 15.9 sen pegged at -0.5 standard deviation below the five-year historical mean forward price-earnings ratio (PER) of 23 times," he said.
Affin Hwang Investment Bank analyst Ng Chi Hoong also in a note lowered his FY23 and FY24 earnings per share (EPS) forecasts for Hartalega by 1.5% and 0.4% to RM634.3 million and RM832.7 million respectively to factor in the latest performance, and the latest ASP and sales volume assumptions.
“We are not expecting a major improvement in sales volume in the next few quarters as the lack of workers has limited Hartalega’s ability to increase output,” he said.
He also said the group’s margins are likely to remain depressed due to competition.
He believes that its earnings before interest, taxes, depreciation and amortisation (EBITDA) margin had yet to bottom at 26.7% in 4QFY22, given that it was still significantly above the 22% to 23% achieved in 2019.
“The management highlighted that as there is new capacity coming through in the first half of 2022, margins would continue to remain depressed as it would be challenging for Hartalega to raise ASPs to pass on the rising production cost. As such, we reckon that profit margins would only likely bottom out by the end of 2022,” he said.
He maintained his "sell" call on Hartalega due to continued uncertainty over future ASPs and lowered his TP to RM3 from RM4.60 based on 13 times 2023 PER (from 12.5 times 2022 PER).
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
pang72
47,745 posts
Posted by pang72 > 2022-05-10 13:57 | Report Abuse
Apple168,
Can you got back to short hengyuan instead of harta?