Harta announced its results for 2Q2010 ended 30/9/2009. Its net profit increased by 25.5% q-o-q or 80.2% y-o-y to RM33.1 million while turnover increased by 7.4% q-o-q or 20.7% y-o-y to RM135 million. The improved performance in QE30/9/2009 over the preceding quarter was attributable to increased demand, effective cost control & more efficient production process. Compared to previous year, Harta has benefited from higher production capacity, improved production process, better product mix, lower input cost & favorable forex movement.
Table 1: Harta's 8 quarterly results
Chart 1: Harta's 8 quarterly results
Valuation
Harta (closed at RM5.61 yesterday) is now trading at a PE of 12.1 times (based on last 4 quarters' EPS of 46.5 sen). The valuation is lower than Topglove (closed at RM8.25 yesterday), which is trading at a PE of 14.5 times (based on Topglove's last 4 quarters' EPS of 57.3 sen).
Technical Outlook
Harta is rising in an uptrend line, with support at RM5.50. In the past 3 months, the share price is also trapped in a rising wedge formation, with resistance at RM5.70 & support at RM5.30.
Chart 2: Harta's daily chart as at Nov 11, 2009_10.10am (Source: Quickcharts)
Conclusion
Based on good financial performance and mildly positive technical outlook, Harta is still a good stock for medium-term investing.
6 comments:
Hi,
I agree with you again on Harta, just like Top Glove it is a good buy for the near future. They both are thinly traded and slightly defensive in a bad market, so if they dip, you just add to your position. Harta also declared a year end dividend. Most brokerages raised there year end target, the highest being over 10.00. Buy and hold.
ASM GLOBAL VENTURES
Good day Alex,
If 2nd waves of H1N1 making the headlines, I am with you on this call. What do think of Supermax?
Technically, how do u see Mudajaya Group?
Hi ASM Global Venture,
Harta at RM10.00? Wow... To think that it was trading at less than RM1.50 in November 2008.
Hi Solomon,
Rubber glove makers has benefited from the report that H1N1 flu strain has mutated into its third strain (according to WHO). This morning, Topglove broke above its recent short-term downtrend line at RM8.25. Looking at the 60-min chart for Supermx, we can see that its 10-period SMA has crossed above its 30-period SMA today. Supermx could be a trading BUY at RM3.50-55.
Dear Alex,
Petra, the shares were down 25 sen to RM2.15. This was the lowest price since May.
At the current price, it is a good trading BUY?
Thanks!
Hi yumi,
Petra broke the horizontal support of RM2.38-40, which is quite bearish. It might test the psychological RM2.00 level. Better wait for clearer sign before buying.
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