Uncertain prospects for HLT Global
Shalini Kumar 
Chan had said HLT has plans to expand its exports to Vietnam

HLT Global Bhd, which debuted on the ACE Market of Bursa Malaysia in January, may not see smooth sailing over the near term despite the generally good prospects for the glove industry.

The company, which primarily designs and manufactures glove dipping lines, is highly dependent on small glove manufacturing companies as well as on a few major clients for growth.

A fund manager says while there is room for growth in the glove industry, the smaller manufacturers – HLT’s key market – would have to differentiate themselves in terms of the products they offer.

“Smaller players need to offer a special product range, otherwise they will definitely face margin pressure, even if they manage to increase their revenue,” he tells FocusM.

Some of the manufacturers HLT serves are Cardinal Health 222 (Thailand) Ltd, PT Medisafe Technologies in Indonesia, Kanam Latex Industries Pvt Ltd in India as well as local companies Green Prospect Sdn Bhd, YTY Industry Sdn Bhd, Rubberex Alliance Sdn Bhd, Latexx Manufacturing Sdn Bhd and WRP Asia Pacific Sdn Bhd.

Despite reportedly controlling 26.6% of the industry market in 2015, the group’s core business has essentially been loss making lately. For the last five quarters, HLT recorded negative numbers in net cash from operations.


Strengthening its position

For the three quarters ended Sept 30, the company suffered a net loss of RM2.02 mil compared with a net profit of RM7.65 for the same period last year.

For Q3 itself, it posted a net loss of RM2.5 mil on lower revenue of RM8.8 mil compared with a RM1.64 mil net profit and revenue of RM17.9 mil a year ago.

The company attributed the lower revenue to outstanding orders brought forward from the previous year being completed. 

In its filing with Bursa Malaysia, the group acknowledges that market conditions are expected to remain challenging due the uncertainty in the business environment.

“Nevertheless, the group will continue to execute its business strategies and has put in place a series of plans to strengthen its position in the glove-dipping line industry in Malaysia as well as the overseas market,” it says.

HLT declined to respond to questions from FocusM.

In September, the group proposed a bonus issue of up to 132.96 million new shares, on the basis of one bonus share for every two HLT shares held.

It also proposed to issue up to 199.44 million free warrants, on the basis of three warrants for every four HLT shares held. The five-year warrants will have an exercise price of 20 sen apiece.

The proposals are aimed at rewarding its shareholders, while expanding the stock’s trading liquidity by way of a larger capital base and to enable HLT to raise proceeds of up to RM39.89 mil as and when the warrants are exercised.

It was reported the group planned to use some of its IPO proceeds to set up a new factory, costing between RM9 mil and RM12 mil, to increase its production capacity.

Executive director and co-founder Chan Yoke Chun had previously said HLT planned to expand its exports to Vietnam, deeming it a promising place to invest as it attracts investors and businesses, particularly from China and Taiwan. Thus far, there has been no announcement on the proposal.

Despite its tepid financial performance, HLT has seen its share price appreciate 22.2% from its closing price of 45 sen on its first trading day on Jan 9 to its closing price of 55 sen on Nov 29.

This article first appeared in Focus Malaysia Issue 261.