Analyst Research Report Snapshot

Title:

Company Update – Hartalega (ADD, maintain) - Efficiency is key

Price:

$46.00

Provider:

Affin Investment Bank

Date:

15 Jan 2013

Pages:

5

Type:

AcrobatPDF

Companies referenced:

HTHB.KL

Available for Immediate Download
Summary:

A visit to Hartalega’s newest plant We recently brought some institutional investors to visit Hartalega’s (Harta) newest production facility namely, Plant 6 in Bestari Jaya, Selangor. The level of automation at this plant and the speed of its production line had certainly impressed us. We note that the current level of automation is about 80% and management is targeting a 100% full-automation by end-FY03/14. (The remaining 20%-labor intensive part is in the quality control and packaging line) Furthermore, we also reckon that 4 out of 10 planned production lines in Plant 6 are the most efficient lines in the country, as each line can generate c.45.3k pieces of gloves/hour vis-à-vis the prevailing industry average of c.28k pieces/hour. Management guided that the remaining 6 production lines (running at an average speed of c.45k pieces/hour) will be completed by July 2013 and that they have successfully secured 60% of the total production capacity for Plant 6 from both new and existing customers.

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