Malacca Securities Sdn Bhd has retained its “BUY” recommendation on Hartalega, but with a lower target price of RM6.78 (from RM7.90) after rolling our valuation metrics to FY23f for a better reflection of normalised ASP, going forward.
It says that its target price is derived by ascribing a targeted PER of 12.0x to their FY23f EPS of 56.4 sen. “
Meanwhile, Hartalega has now implemented a dividend policy of distributing a minimum of 60.0% of annual net profit, after taking into consideration the one-off special tax under “Cukai Makmur, the stockbroking house says.
The analyst firm says that although the reported numbers were deemed to be within our expectations, we trimmed our earnings forecast by 9.5% and 6.8% to RM3.65billion and RM1.93 million for FY22f and FY23f respectively to account for the impact from the implementation of “Cukai Makmur” in FY22f as well as weaker utilisation rate.
On workforce and production, it has gradually returned in recent months, capacity utilisation has started to see some improvement for all local gloves manufacturers. Hence, that may provide some cushion to the downward revision of ASP in the coming quarter
It said to date, more than 90.0% of Hartalega employees including migrant workers have completed the two doses of vaccination.
“Meanwhile, Hartalega maintained its leading position among 94 companies in the health care equipment & supplies industry under the MSCI ESG Rating at “AA”,” it says
