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QuestionsCategory: Business QuadrantHartalega case study
Mun seng Lee asked 7 years ago

Hi Fifth person
I have a question on yesterday webinar on hartalega case study. What you presented on its financial numbers, are those the latest FY numbers? I had both hartalega and RS before which I have both divested recently.
Comparing the two, I find RS valuation is actually more reasonable in terms of PE. If you have invested both of them 3 yrs ago till now, I believe RS gave you a better return in terms of share price appreciation. Not forgetting also there is exchange loss in Hartalega which is trading in RM.
Thanks
 
 
 

1 Answers
Rusmin Ang answered 7 years ago

Hi Mun Seng,    
 
The gross and net profit margins were based on 2011 figures. We wanted to bring you back in time and show you how we made our decision before we bought Hartalega in 2011.   
 
Yes, there is FOREX risk if your buying currency is not in Ringgit. Riverstone (RS) has carved out their niche in the clean room market. Whereas, Hartalega is in the examination gloves market. Similar glove industry, but different target group.    
Anyway… Congratulations! You must’ve made pretty good money! 

Mun seng Lee replied 7 years ago

HI Rusmin, thanks for your fast reply. Got your point.My take is most, if not all Malaysia glove makers are in fact ramping capacity at a furious pace, there may be a glut in 2015. Though different target segment may have different specs requirements, I feel price erosion or war is inevitable if there is a supply glut. I will let the market consolidate itself before taking a look at this industry again.

Rusmin Ang replied 7 years ago

Thanks for your pointer too, Mun Seng :)