For QE30/6/2018, Harta's net profit rose 7% q-o-q or 30% y-o-y to RM125 million while revenue rose 15% q-o-q or 18% y-o-y to RM706 million. Revenue increased q-o-q driven by higher sales volume which increased by 6.4% and higher average selling prices. PBT rose 8% q-o-q in line with higher sales revenue attained, lower heat cost, chemical cost, upkeep of plant & machinery and improved operational efficiency.
Table: Harta's last 8 quarterly results
Graph: Harta's last 43 quarterly results
Harta (closed at RM6.17 yesterday) is trading at a trailing PER of 44 times (based on last 4 quarters' EPS of 14.16 sen). At this PER, Harta is deemed fully valued. However, its PEG ratio is fairly reasonable at 1.2 times based on EPS CAGR of 37% over the past 2 years.
Harta is trapped within a symmetrical triangle. If it can break to the upside of the triangle at the RM6.20, its uptrend will likely continue.
Chart 1: Harta's daily chart as at Aug 7, 2018 (Source: Shareinvestor.com)
Chart 2: Harta's weekly chart as at Aug 7, 2018 (Source: Shareinvestor.com)
Based on improved operating performance, strong leadership in the glove sector and 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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