Results in line. 9MFY12 core net profit of RM160m (+18% YoY) made up 77%
of our and consensus full-year forecasts. Despite the 36% rise in its
share price YTD, Hartalega's current 11x CY13 PER is still at a steep
discount to less profitable Top Glove’s 18x. The company has also
declared a 1-for-1 bonus and 1-for-5 free warrants issue. With the
resulting expected boost in trading liquidity, we believe the valuation
gap between Hartalega and Top Glove will narrow. Hence, we raise our TP
to RM9.20 (+8%) on a target CY13 PER of 13x (12x previously).
Maybank Research 23 Feb 2012
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