Comprehensive Financial Analysis of Hartalega Holdings and Industry Peers

Date: November 5, 2024

Broker: Maybank Investment Bank Berhad

Introduction

Our detailed analysis covers Hartalega Holdings Berhad (HART MK) and its industry peers, with an emphasis on their financial performance, ESG (Environmental, Social, and Governance) scores, and sustainability initiatives. This report provides an in-depth look at how these companies are navigating industry challenges and their strategies for future growth.

Hartalega Holdings Berhad (HART MK)

Overview

Hartalega is the world’s largest producer of nitrile medical gloves. The company is known for its technological advancements, product quality, and strong balance sheet.

ESG Performance

Hartalega’s ESG score improved to 64/100, up from 61/100 in FY22. Despite some challenges, such as rising carbon emissions and total waste generated intensity, the company remains committed to aggressive carbon reduction initiatives. Key initiatives include cogeneration, solar power integration, and investments in energy-efficient technologies, aiming to reduce emissions intensity by 25% by FY2026.

Financial Performance

Hartalega’s financial performance shows resilience amid industry headwinds. The company maintains a strong balance sheet with MYR0.39 per share in net cash as of end-June 2024. The revenue for FY24 stood at MYR1,838 million, a decrease from the previous year, but is expected to recover to MYR2,731 million in FY25.

Key Metrics

• Revenue: MYR1,838 million (FY24), expected to rise to MYR2,731 million (FY25)
• EBITDA: MYR178 million (FY24), projected to increase to MYR328 million (FY25)
• Core net profit: MYR50 million (FY24), anticipated to grow to MYR184 million (FY25)
• Core FD P/E: 61.0x (FY24), expected to decrease to 54.2x (FY25)

ESG Initiatives

Hartalega has invested significantly in environmental stewardship, including the establishment of two cogeneration power plants and the installation of a 1.65 MW rooftop solar PV system. The company reported zero incidents of non-compliance with environmental regulations in FY24.

Top Glove Corporation Berhad (TOPG MK)

Overview

Top Glove is one of Hartalega’s key competitors in the nitrile medical gloves market. The company has a significant global presence and is known for its large-scale production capabilities.

ESG Performance

Top Glove has an above-average ESG score of 56/100, trailing behind Hartalega. The company faces challenges related to carbon emissions and waste management but continues to invest in sustainability initiatives.

Financial Performance

Top Glove’s financial performance has been under pressure due to increased competition and rising costs. The company’s revenue and profit margins have been impacted, but it remains a significant player in the industry.

Key Metrics

• Revenue: MYR2,731 million (FY23)
• EBITDA: MYR328 million (FY23)
• Core net profit: MYR184 million (FY23)
• Core FD P/E: 54.2x (FY23)

ESG Initiatives

Top Glove focuses on reducing its carbon footprint through energy-efficient technologies and waste management practices. The company has implemented several initiatives to improve its environmental impact, including the use of renewable energy sources and advanced waste treatment systems.

Conclusion

Hartalega Holdings Berhad continues to demonstrate strong financial resilience and commitment to sustainability, maintaining an above-average ESG score. While Top Glove faces challenges, it remains a key player in the industry with ongoing efforts to enhance its ESG performance. Both companies are navigating industry headwinds with strategic initiatives aimed at long-term growth and sustainability.

Stay tuned for more updates and in-depth analyses of leading companies in the medical gloves industry.