MONEY MASTER

After a grueling downcycle,  Hartalega Holdings Bhd  (KL:HARTA) is showing signs of a potential turnaround. The glove maker, once battered by post-pandemic oversupply and predatory pricing, is now regaining its footing — thanks to a confluence of trade tariffs, automation efforts, and the slow but steady return of US-based demand. US Tariffs May Spark Sudden Reorder Wave The United States has imposed hefty 80–130% tariffs on Chinese medical gloves, a move that effectively narrows the pricing gap between Malaysian and Chinese producers. As US glove inventories dwindle and buyers brace for price normalization, analysts believe replenishment could accelerate. “Despite some buyers still adopting a wait-and-see approach, order visibility is improving, and a sudden uptick in orders isn’t off the table,” Kenanga Research noted in its company update. Hartalega, which now derives 70% of its glove sales from the US (vs. its historical average of 50%), stands to benefit the most. Efficie...

After months of deep corrections and industry pessimism, Malaysia’s glove sector is showing early signs of a turnaround—offering investors an opportunity to accumulate select counters at  multi-year low valuations . In the latest sector review, market analysts highlighted that glove manufacturers are currently trading at  -2 standard deviations below their 1-year forward P/B average , a level that typically signals deep-value territory. Valuations Reflect Fear, Not Fundamentals Despite the sector being in a down-cycle, companies like  Hartalega (HARTA)  and  Kossan Rubber (KOSSAN) continue to post profits and maintain operational stability. With HARTA trading at  1.3x P/B  and KOSSAN at  1.0x , their valuations appear overly depressed—especially in light of improving demand visibility. Unlike previous downturns where companies dipped into the red, most glove players today remain operationally resilient, supported by leaner inventories and more dis...

Hartalega Holdings Bhd reported a 69% drop in net profit for its second quarter ended Sept 30, 2024, as rising raw material costs and a stronger ringgit affected export revenues. The net profit for this period was RM8.63 million , while without deferred tax income from capital investment incentives, the company would have recorded a pre-tax loss of RM47.45 million . Despite these challenges, revenue increased 44% year-on-year to RM652.07 million , driven by higher sales volume. A first interim dividend of 0.56 sen per share was declared, payable on Dec 11. Industry Challenges and Outlook: The glove manufacturing sector remains pressured by global oversupply and competitive pricing, which has impacted average selling prices . Furthermore, global shipping disruptions and volatile forex markets have contributed to these difficulties, with Hartalega deriving most of its income from exports. However, the company sees potential benefits from upcoming US tariffs on Chinese gloves , eff...

  Hartalega Holdings Bhd is anticipated to report a significant increase in earnings for the first quarter of FY2025, driven by higher utilisation rates and increased sales orders, according to Phillip Capital. Key Points: Earnings Forecast: Hartalega's net profit for the first quarter ended June 30 (1QFY2025) is expected to be between RM45 million to RM55 million, up from RM14 million in 4QFY2024 and RM4 million in 1QFY2024. Factors Driving Growth: Higher Utilisation Rate: Hartalega's plant utilisation rate is currently at 75%-80%, with monthly sales orders averaging two billion pieces, up from 1.8 billion pieces in 4QFY2024. Increased Sales Orders: Continuous customer inventory replenishment is contributing to busier plants. Easing Raw Material Prices: This is expected to result in stronger margins. Higher Average Selling Price (ASP): ASP per 1,000 pieces has increased by 5% to US$20 (RM91.14)-US$22 from up to US$21 in 4QFY2024. Market Performance: Shares of Hartalega h...