PETALING JAYA: Hartalega Holdings Bhd
’s sales volume in the first quarter of its financial year ended March 30, 2027 (1Q27) is expected to grow modestly, as the glove maker is already operating near full utilisation.
This is based on an effective capacity of 26.4 billion to 28.8 billion pieces per year, excluding the hibernated Plants 3 and 4.
Several research firms have maintained a “hold” call on the stock, noting that while near-term sentiment is turning slightly more constructive, volume upside remains capped as operations are already running at optimal levels.
BIMB Research said earnings will be price-led, with average selling prices (ASPs) of around US$26 to US$28 per 1,000 pieces expected to track peers, alongside full pass-through of rising input costs.
It noted that the group had raw materials secured through June 2026, with July volumes likely intact, though pricing visibility remains limited.
Analysts noted that the Middle East conflict led to a sharp spike in core raw material prices, with costs surging nearly two-fold in January 2026 before easing over the past three weeks.
They said despite the volatility, supply remains stable as Hartalega maintains a diversified supplier base across the region.
“The group remains cautious and continues to procure raw materials on a month-to-month basis, with supply currently secured through June,” TA Research said, adding that its recent increase in ASPs is sufficient to offset the higher operating and raw material costs.
As a result, TA Research expects the group’s profit before tax margin to improve quarter-on-quarter, supported by enhanced operational efficiency and the timely implementation of price adjustments.
In FY26, efficiency and operational discipline remained the key earnings driver for Hartalega.
Net profit surged 38.2% year-on-year to RM103mil despite a 17.4% decline in topline revenue to RM2.1bil. TA Research said the results were higher than its forecast and 15% above consensus.
“We raise our FY27 to FY28 earnings projections to RM196.1mil and 187.9mil (from RM131.4mil and RM146.9mil) after incorporating FY26 numbers into our model as well as improving cost optimisation.”
However, TA Research reiterated its “hold” recommendation on the stock with a RM1.26 per share target price (TP).
Meanwhile, BIMB Research upgraded Hartalega to a “hold” from a “trading sell” previously. It had ascribed a higher TP of RM1.10 from 96 sen a share.
A dealer said automation will continue to play a key role in driving cost reductions and improving operational efficiency for Hartalega. He expects the group to progressively reduce its unit costs, providing the operational flexibility required to navigate market volatility.
