Highlights of the day
§ Hartalega Holdings (Company Update): Efficiently automated, pedestrian growth for next 12 months (HOLD, TP: RM7.82) [download report]
We came back from a visit to Hartalega Holdings (Hartalega) feeling positive on its longer term prospects but expect pedestrian growth in FY13. We like Hartalega because: (i) its “highly automated production processes” model is moving from ‘good’ to ‘great’ as they are head and shoulders above its peers in terms of better margins, solid improvement in production capacity and reduction in costs; (ii) offers superior quality nitrile gloves through product innovation; and (iii) nitrile gloves segment is booming. The stock is trading at 13.4x CY12 and 12.2x CY13 EPS, compared to average net profit growth of 8%. Recommend a HOLD with TP RM7.82 based on 13x CY12 EPS of 60.2 sen, 18% above its historical average due to its superior margins.
Other reports
Other Malaysian news
§ MAS-AirAsia: Fate of partnership in PM’s hands
§ AirAsia: AirAsia X may face penalty if it ends flights to Christchurch
§ MAS: Fails to strike deal with Qantas
§ SP Setia: Said to be keen on fresh bid for London’s Battersea site
§ Parkson: Plans RM3bn chain of shopping malls in China
§ DRB-Hicom: VW target 40% local content in 12-18months
§ Eversendai: Has bid for RM800m worth of job locally
§ Malaysia Smelting: Ropes in Indonesia JV partner
§ AZRB: RM764.9m viaduct works for MRT to start end-March
§ Eng Kah: Ticket to expansion
§ Uzma: Gets back into growth phase
§ FGVH: Selling Aussie firm stake
§ SC: Chairman Zarinah to retire end-March
§ Property: MRT Corp not keen on property play
§ Retail: Malaysia’s 2011 retails sales exceed RM83bn
§ Economy: BNM maintains overnight policy rate at 3%
Global news
§ US: Payrolls in climb 227,000; jobless rate holds at 8.3%
§ US: Wholesale inventories increase 0.4% as sales fall 0.1%
§ US: Local governments show first payroll boost since August
§ Europe: Greek credit swaps payouts to be expedited after trigger ruling
§ Europe: German January exports rebound
§ China: Inflation eases, data points to slowdown
§ India: Government to scrap cotton-export ban after growers, China protest
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