Stock Name: HARTA
Company Name: HARTALEGA HOLDINGS BHD
TA Securities initiated coverage on Hartalega Holdings Bhd with a 'buy' rating and a target price of RM5.50, citing the world's largest synthetic rubber glove maker's production efficiency, nitrile capacity and industry high operating margins among reasons.
"Hartalega currently pays out around 45 per cent of net profit," the research house said in a note on Thursday.
"Considering proceeds from capital gains and dividends, this provides a potential total upside of 16 per cent."
Higher net profit margins due to automation and production efficiency, and Hartalega's upcoming new glove manufacturing complex could well translate into positive factors for the share price, it added.
TA's target price on Hartalega is 12.2 per cent higher than the stock's last traded price of RM4.90.
Key downside risks to TA's fair value include falling profit margins and lower-than-expected average selling price due to strong competition, according to TA.
As of 9.47am, the counter remained unchanged at RM4.90, while the benchmark stock index rose 0.19 per cent.-- Reuters
Company Name: HARTALEGA HOLDINGS BHD
| Research House: TA | Price Call: BUY | Target Price: 5.50 |
TA Securities initiated coverage on Hartalega Holdings Bhd with a 'buy' rating and a target price of RM5.50, citing the world's largest synthetic rubber glove maker's production efficiency, nitrile capacity and industry high operating margins among reasons.
"Hartalega currently pays out around 45 per cent of net profit," the research house said in a note on Thursday.
"Considering proceeds from capital gains and dividends, this provides a potential total upside of 16 per cent."
Higher net profit margins due to automation and production efficiency, and Hartalega's upcoming new glove manufacturing complex could well translate into positive factors for the share price, it added.
TA's target price on Hartalega is 12.2 per cent higher than the stock's last traded price of RM4.90.
Key downside risks to TA's fair value include falling profit margins and lower-than-expected average selling price due to strong competition, according to TA.
As of 9.47am, the counter remained unchanged at RM4.90, while the benchmark stock index rose 0.19 per cent.-- Reuters
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