Wednesday, April 18, 2012

MIDF Research maintains Neutral on Hartalega, target price RM7.06

Source From (The Edge Malaysia): http://www.theedgemalaysia.com/business-news/211921-midf-research-maintains-neutral-on-hartalega-target-price-rm706.html%0A

Published: 16 April 2012
KUALA LUMPUR (April 16): MIDF Research has maintained its Neutral recommendation on HARTALEGA HOLDINGS BHD with a target price of RM7.06, and it was positive on the glove maker Next Generation Integrated Glove Manufacturing Complex (NGC) project.

The research house said it was positive on the project, as the demand for nitrile glove has been growing strongly especially from the developed markets.

However, we believe that the stock price is ahead of its fundamentals, and factors such as overcrowding of nitrile glove producers, volatility in exchange rate, and increase in nitrile material price will limit the upside potential.

As the contribution from the NGC Project will only be enjoyed from FY15 onwards, we are maintaining our NEUTRAL recommendation with an unchanged TP of RM7.06, derived from 11x EPS13, based on its 3-year historical PER average, it said in a note on April 16.

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