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KUALA LUMPUR (September 4): With Hartalega Holdings Bhd shares falling 31.66% from their all-time high reached in late July, fund managers perceive a buying opportunity could arise if the glove giant continues falling down.
Hartalega led the charge down yesterday among the big four rubber glove manufacturers in Bursa Malaysia, ending the day RM1.50 or 9.77% lower at RM13.86. He was the second biggest loser of the day on the stock market. At the counter 15.92 million shares were traded.
Hartalega’s share price drop has not only taken it away from its record of CU20.80 reached on July 30, but also away from the target price (TP) of the shares set by analysts.
According to Bloomberg, Hartalega’s 12-month consensus TP is RM22.61, 63.1% higher than yesterday’s closing price. The price gap is even more striking compared to some TPs that are on the higher end of the scale. AffinHwang Capital, for example, has a TP of RM 28.80, while Kenanga has set it at RM 26.22.
Hartalega is now cheaper than competitors Kossan Rubber Industries Bhd (down 7.41% or RM1.12 to RM14 yesterday) and Supermax Corp Bhd (down 5.14% or RM1.10 to RM20.30), which were the third and fourth biggest loser in Bursa. , respectively, yesterday.
Hartalega, however, is still outperforming Top Glove Corp Bhd, which closed 3.68% or 32 sen below RM8.69 yesterday.
Fund managers contacted by The edge He said that if Hartalega declines further, a buying opportunity could arise.
“We believe it [that a buying opportunity is on the cards]. The price is more attractive now. However, this would also depend on your results, which we think should be very good, with the same for others. [glove counters]”Said a fund manager, speaking on condition of anonymity.
William Ng, chief investment officer at LeInves PLT, agreed, but emphasized the need to look at the overall market environment. In particular, he said that many people are now setting their eyes on the development and distribution of a vaccine for the COVID-19 pandemic.
“You have to be selective, the Big Four are still good long-term picks because of their margins and volume versus the other players in the market, not to mention the quality of their products,” Ng said.
Bloomberg The data indicates that Hartalega has a price / earnings (P / E) ratio of 83.44 times. So far this year, it has increased by 152.92%.
For the first quarter ending June 30, 2020, Hartalega’s earnings increased 134% to a record RM219.72 million, from RM94.06 million a year earlier thanks to average sales prices Taller. Quarterly revenue increased to RM920.09 million from RM640.1 million.
At its current value, Hartalega has a market capitalization of RM47.51 billion.
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