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HARTA
AGM & PRESS CONFERENCE UPDATES
On 15 September 2020, HARTA had its AGM and press conference. We gathered that:
1) GLOVE DEMAND IS STILL ON THE RISE, 30% & 100%. Since the COVID-19 outbreak, glove demand for developed and developing countries have increased by 30% and 100% respectively.
2) 120 BILLION GLOVE SHORTAGE TILL 2022, WITH OR WITHOUT VACCINE. HARTA
expects an additional demand for 120 billion pieces of disposable
gloves in the next three years. Undersupply issue may persist, even if
vaccine is available.
3) GLOVE MANUFACTURE READINESS TAKES TIME - 3 YEARS. Glove dipping is a long process. The expansion or transition period to meet the demand is at least three years.
4) SHARP EARNINGS SHRINKAGE AFTER 2021? DON’T THINK SO.
‘We do not even know whether the glove industry has enough to meet the
demand for 120 billion more pieces of gloves in the next three years,"
said Mr. Kuan Kam Hon, HARTA’s Executive Chairman.
5) ACCELERATING CAPACITY EXPANSION, 38 TO 95 BILLION PIECES IN 7 YEARS.
To cater to the tremendous demand growth, HARTA is accelerating its
capacity expansion. They target to increase their annual capacity from
38 billion pieces in 2020 to 95 billion pieces by 2027.
6) ASPs CONTINUE TO CLIMB. HARTA expects to post even
better financial results in the coming quarters, as ASPs continue to
climb due to the unabated demand for gloves.
FOOD FOR THOUGHT
Years of observation tells us that HARTA's management team has been
low-profile. They are focused on doing and growing their business, which
is great. If they expose themselves to the public and mentioned
something, it probably carries weight.
On Tuesday's AGM & press conference, they stated they
don't think the analyst's assumption of sharp earnings fall after 2021
is right. (Refer to screenshot above)
How would you interpret it?
DISCLAIMER
The article above is for sharing purpose only. Our view may not be inaccurate. There is no buy/sell recommendation.
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