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Full Version: Hartalega - World Class Manufacturer First Class Gloves
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Presentation of Hartalega in Invest Malaysia Conference 2013
Hartalega is a company to watch for, for those have vested interest on nitrile glove company. The company has the lowest production cost, base on my best knowledge. If the company goes with price war, all others will be affected, except those are able to differentiate its products and services...

(not vested)

Hartalega should be more aggressive on its pricing

Hartalega Holdings Bhd
(Dec 2, RM6.75)
Upgrade to “buy” with a target price (TP) of RM 8.45. The first two new-generation complex (NGC) production lines will come online this month. Backed by incoming capacity (about nine billion pieces per annum) and the best operating structure in the sector — break even utilisation of only 42% — we expect Hartalega to be more aggressive on its pricing, once it has commissioned sufficient capacity at the NGC plants. It would help Hartalega to: i) grab market share from competitors; ii) maximise utilisation and profits and iii) derail competitors’ expansion plans by depressing future internal rate of return (IRRs).
The company will benefit from the weakening of RM and oil price. The company business is M'sia-based, export-oriented, and billed in US$. The Synthetic rubber or nitrile, which is derived from crude oil, is a crucial raw material for glove production.

But one important trend found in recent 2Q report of Hartalega, is the downtrend of ASP, which hit both top and bottom line of the company. Base on The Edge M'sia, the ASP of nitrile glove has reduced to US$27.81 per 1000 gloves in 2Q, from US$28.34 per 1000 gloves in 1Q. Will the trend continue? It is a important trend to monitor...

(not vested, but monitoring Riverstone)
The article summaries the status of glove makers in Malaysia. Among the big-four, I prefer Hartalega, on its production proficiency...

(not vested)

Share valuations of world's top medical glove makers surge - but not on MERS

KUALA LUMPUR/BENGALURU, June 25 - Share valuations of the four biggest medical glove makers in Malaysia - in the world, in fact - have soared to historic highs, but not because of the MERS outbreak.

The median forward 12-month price-to-earnings ratio of Top Glove , Supermax , Kossan Rubber Industries and Hartalega has risen to 18, the highest ever, according to Thomson Reuters data. The figures also show their combined revenue is expected to grow 20 percent in 2015, the most in five years.

The chief driver of sales is the ringgit's slump to nine-year lows against the dollar, making exports more competitive. Low raw material prices will also help widen profit margins.
Looking at its last 5 years performance, pre-pandemic had NPM of ~15% (which is impressive by mfg standards). The covid years of 2021/22 gave them 40% NPMs! Live by the sword and die by it. With 40% NPMs, the Chinese have arrived in large numbers and the Chairman has probably given a realistic view of the future~

Hartalega AR23 and AGM QnA

Amidst this environment, the Group views fluctuating prices, rising operating costs and intense competition from global manufacturers as primary challenges moving forward. We are fully conscious of the reality that the glove market has changed dramatically and is not likely to revert to a pre-pandemic landscape. We are resolute to meet these  challenges head on.

In the most recent quarter, our ASPs ranged around USD 20 per thousand pieces. The Chinese players are pricing their products relatively lower to maintain ASP gap with Malaysian players.

Having said that, our Chinese peers currently have key advantage in the form of lower energy cost due to the cheaper cost of coal as compared to domestic players who are using the more expensive but cleaner natural gas
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