KUALA LUMPUR (Jan 30): Shares of glove manufacturers, led by Hartalega advanced in early trade on Monday on improving outlook for the sector.
At 9.30am, Hartalega rose 33 sen to RM7.23, Top Glove was up 13 sen to RM5.18, Supermax added 11 sen to RM2.26 while Kossan was up three sen to RM3.50.
CIMB Research in note Jan 27 had maintained its Outperform rating on Hartalega and said the affordability of nitrile gloves had improved, primarily due to a 35% drop in nitrile price, in contrast to a 17% rise in natural rubber price.
It said this was positive for Hartalega as it will underpin demand for nitrile gloves at a time when EU healthcare budgets are being cut.
“We retain our valuation basis of 11.75x forward P/E, 10% discount to our Top Glove target. Nitrile gloves are now 20% cheaper to produce versus NR, which will underpin demand.
“Hartalega is our top pick in the glove sector with leading returns and margins. Maintain Outperform,” it said.
At 9.30am, Hartalega rose 33 sen to RM7.23, Top Glove was up 13 sen to RM5.18, Supermax added 11 sen to RM2.26 while Kossan was up three sen to RM3.50.
CIMB Research in note Jan 27 had maintained its Outperform rating on Hartalega and said the affordability of nitrile gloves had improved, primarily due to a 35% drop in nitrile price, in contrast to a 17% rise in natural rubber price.
It said this was positive for Hartalega as it will underpin demand for nitrile gloves at a time when EU healthcare budgets are being cut.
“We retain our valuation basis of 11.75x forward P/E, 10% discount to our Top Glove target. Nitrile gloves are now 20% cheaper to produce versus NR, which will underpin demand.
“Hartalega is our top pick in the glove sector with leading returns and margins. Maintain Outperform,” it said.
