HARTA (5168) : RHB Research maintains Buy on Hartalega
KUALA LUMPUR: RHB Research has maintained its Buy on Hartalega with a target price of RM8.04 pegged to 21 times FY16F P/E.
In a note on Wednesday, the research house believed that Hartalega’s earnings growth will be led by capacity expansion from the NGC.
"Its margins could also be sustained from higher logistic and operational efficiencies, while we expect cost push-factors to recede. The stronger USD/MYR exchange rate could potentially boost both earnings and margins," it said.
It added that the company has scheduled to commence the first two lines at the NGC by end-2014 and targets to complete the first two plants (a total of 24 lines) by end-2015.
This would bring installed capacity to 22 billion pieces by FY16 from 14 billion in FY14.
It added that the NGC will help Hartalega achieve cost efficiency and higher productivity.
Plants and warehouses will be streamlined to achieve optimal logistics efficiency while the plants will be equipped with the most technologically-advanced production lines and greater automation, which may help to sustain margins.
http://www.thestar.com.my
KUALA LUMPUR: RHB Research has maintained its Buy on Hartalega with a target price of RM8.04 pegged to 21 times FY16F P/E.
In a note on Wednesday, the research house believed that Hartalega’s earnings growth will be led by capacity expansion from the NGC.
"Its margins could also be sustained from higher logistic and operational efficiencies, while we expect cost push-factors to recede. The stronger USD/MYR exchange rate could potentially boost both earnings and margins," it said.
It added that the company has scheduled to commence the first two lines at the NGC by end-2014 and targets to complete the first two plants (a total of 24 lines) by end-2015.
This would bring installed capacity to 22 billion pieces by FY16 from 14 billion in FY14.
It added that the NGC will help Hartalega achieve cost efficiency and higher productivity.
Plants and warehouses will be streamlined to achieve optimal logistics efficiency while the plants will be equipped with the most technologically-advanced production lines and greater automation, which may help to sustain margins.
http://www.thestar.com.my
