HARTALEGA (HART)’s quarter three financial year 2026 (3QFY26) core net profit beats Maybank Investment Bank (MIB) and consensus financial year 2026 estimates.
HART continues to focus on cost discipline and production efficiency. Excluding a MYR16 mil unrealised forex loss, a MYR0.4 mil fair value gain, and MYR2.6 mil in one-off gains, 3QFY26 core net profit came in at MYR44.1 mil, bringing 9MFY26 core net profit to MYR68.2 mil.
The earnings gap was due to lower-than-expected tax charges and operating costs, which helped to cushion the impact of the MYR appreciation against the USD and lower average selling prices due to stiff competition.
Production costs are expected to trend lower as HART continues to drive savings through automation, digitalisation and tighter control over energy, materials and labour.
Plant 9 remains HART’s most advanced facility, with its operating model and efficiency gains to be replicated at hibernated Plant 3 and eventually across other plants, supported by MYR285 mil capital expenditure over the next two years.
Targeted effective capacity is 30b/33b/37b by FY27/28/29. On forex, HART continues to hedge part of its receivables, though some exposure remains unhedged, leaving near-term earnings sensitive to currency volatility.
“While sector sentiment remains weighed down by China-led capacity expansion in the Southeast Asia and a stronger MYR, we believe the recent share price weakness has largely priced in these risks,” said MIB. —Feb 11, 2025
Main image: Hartalega
