Stringent measures: Hartalega’s glove manufacturing facility. The country’s second-largest listed glove maker’s one-month long voluntary closure to contain Covid-19 infections is expected to cause a capacity loss of less than 0.5% of its total annual output. PETALING JAYA: The temporary closure of Hartalega Holdings Bhd’s eight production lines would only have a minimal impact on the bottomline of the country’s second-largest listed glove maker. BIMB Securities Research analyst Saffa Amanina pointed out that the one-month long voluntary closure to contain Covid-19 infections is expected to cause a capacity loss of less than 0.5% of total annual output. “On the assumption that the number of infected workers does not further increase substantially and there are no extensions provided on the duration of the production lines closure, the impact to our (forecast) financial year 2021 (FY21) earnings would be minimal, less than 1%, and therefore, insignificant at the moment. “We make no adjustment to our forecast at this point due to its insignificant impact on earnings and pending further details from an upcoming conference call with the management, ” she said in a note yesterday. BIMB Securities Research projects Hartalega’s core profit in the current FY21 ending March 31 to increase by over six-fold to RM2.81bil as compared to RM433.6mil a year earlier. This is on the back of stronger sales, led by the surge in glove demand globally, with the revenue in FY21 forecast to leap by nearly 121% year-on-year to RM6.46bil. On Dec 14, Hartalega confirmed that 35 of its employees had tested positive for Covid-19 – 20 of them at the Bestari Jaya operations and 15 at the Next Generation Integrated Glove Manufacturing Complex (NGC) in Sepang. This was following a mass testing undertaken by Hartalega on its 8,772 employees from Dec 7 to 10. However, Hartalega chief executive officer Kuan Mun Leong said in an earlier statement that the stringent measures taken by the group had resulted in a significantly low positive rate of only 0.4% infection rate. “This is significantly lower than the positive rates of other similar factories, ” he pointed out. All the positive cases have been transferred to hospitals as per the Health Ministry’s instruction and a thorough disinfection of all areas attended by the affected individuals have also been carried out by a third-party professional provider. Hartalega has also placed workers that had direct contact with those who are infected under quarantine for 14 days and will ensure they undergo subsequent testing as per the standard operating procedures before being permitted to return to work. Additionally, in order to further enhance the effectiveness of existing measures, the group is looking into implementing a periodical RTK testing for all factory workers moving forward. BIMB Securities Research has maintained its “buy” call on Hartalega, with a target price of RM23.80.
buyappleacc.com is a professional website selling Apple Developer account for more than 3 years, choose us, provide you with the best Apple Developer account. Don't hassle, just step out.