For QE30/6/2017, Harta's net profit rose 8% q-o-q or 72% y-o-y to RM96 million while revenue rose 14% q-o-q or 50% y-o-y to RM601 million. Revenue rose q-o-q due to increase in sales volume and average selling price. Profit before tax dropped 2.3% q-o-q mainly due to higher upkeep cost, depreciation expense, packaging material cost, chemical cost and term loan interest expense.
Table: Harta's last 8 quarterly results
Graph: Harta's last 39 quarterly results
Harta (closed at RM7.15 yesterday) is trading at a trailing PER of 36 times (based on last 4 quarters' EPS of 19.68 sen). At this PER, Harta is overvalued.
Harta is in a long-term uptrend line, with strong support at the 20-month EMA line at RM5.00. Harta needs to consolidate its recent gain and/or wait for its profit to grow further before the uptrend can continue.
Chart: Harta's monthly chart as at Aug 8, 2017 (Source: shareinvestor.com)
Based on improved operating performance, strong leadership in the rubber glove sector & capable management team, Harta is considered a good stock for long-term investment. Its rating is kept at HOLD due to its demanding valuation.
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