Particular tax, falling ASPs dampen Hartalega’s outlook

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KUALA LUMPUR: Hartalega Holdings Bhd recorded consensus-beating earnings the the primary half of the monetary 12 months however even that has proved disappointing given the anticipated implementation of the federal government’s one-off particular tax and declining glove common promoting costs (ASP).

TA Securities stated the glove maker’s 315% improve in internet revenue year-on-year (y-o-y) to RM3.17bil got here to 75.2% of its full-year forecast and 82.4% of that of consensus.

Nonetheless, it deemed the end result beneath estimates as a result of affect of the affect of the particular tax and expectations of additional normalisation in ASP.

“We anticipate the utilisation charges to choose up within the coming months and enhance to circa-77% ranges in 1Q22, whereas ASP is predicted to normalise by 1Q22.

“Primarily based on channel checks, the glove ASP is at round USD30-35 per 1000 at present,” it stated in a Wednesday notice.

Individually, the analysis agency expects the extra particular tax to extend Hartalega’s contribution to the federal government by about RM400mil in FY22.

“We scale back our FY22/FY23/FY24 earnings by 25.5%/41.7%/18.0% after lowering our gross sales volumes by circa-8% and ASP assumptions by 2.8%.

“Observe that our FY22/FY23/FY24 ASP is at USD58.2/26.9/25.5 per 1,000 gloves,” it stated.

The analysis agency maintained its “purchase” name on Hartalega with an unchanged goal value of RM6.59



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