Investors Presentation 2018 - Fundamental Analysis · Growing Global 4 4 ...

Growing Global

……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality1

Investors

Presentation 2018

Growing Global


About us

Growing Global


Contents

Financial Performance

Dividends & Share Price

Performance

Industry Outlook

Hartalega NGC Status

Antimicrobial Gloves (AMG)

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Financial Performance

High growth glove company

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Sales Revenue & Profit

110 160 240 282 443

572 735

921 1,032 1,107 1,145

1,498

1,822

2,405 F

Y05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

Revenue (RM mil)

13 19 37 40 85

146 190 201

234 234 210

259 283

439

FY

05

FY

06

FY

07

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

Profit After Tax (RM mil)

Revenue

32.0%YoY Increase

Profit After Tax

55.2%YoY Increase

FY18 Net Profit Margin

18.2%

Revenue CAGR

26.7%FY05-FY18

PAT CAGR

31.0%FY05-FY18

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EPS Growth

2.66 2.90

4.91

6.546.91

7.97 7.85

6.74

7.858.62

13.28

FY

08

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

Earnings per Share (sen) EPS

54.0%YoY Increase

EPS CAGR

17.4%FY08-FY18

Net Earnings grew from RM40m (2008) to RM439m

(2018) or 10.9 times in 10 years

Number of shares grew from 243m shares (2008) to

3,311m shares (2018) as a result of bonus issue of

1 for 2 in 2010, bonus issue of 1 for 1 in 2012,

bonus issue of 1 for 1 in 2015 & bonus issue of 1 for

1 in March 2018 which not hinder EPS from growing

Focus on sustaining EPS via combination of

economies of scale and stable margins

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Quarterly Profit & Corporate Exercise

5763

56

96

125

48

60

71

113

50

7366

113

55

62

89

116

FY15 FY16 FY17 FY18 FY19

Q1 Q2 Q3 Q4 1Q19

vs 1Q18 PAT

29.7%YoY Increase

1Q19

vs 4Q18 PAT

7.4%QoQ Increase

Increase in Q1 due to higher revenues from

higher ASP and capacity utilization rates.

We are currently commissioning lines in NGC

Plant 5. These lines will contribute to our Q2-

Q4 growth.

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Dividend & Share Price

Performance

Good growth prospects

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Hartalega’s Dividend Growth

Dividend per share is stated post-bonus issue*

1.001.67

2.633.13

3.63 3.633.25

4.00 4.25

7.95

34.4%33.9%

40.1%

45.3%45.7%47.0%49.9%50.9%49.3%

60.0%

FY

09

FY

10

FY

11

FY

12

FY

13

FY

14

FY

15

FY

16

FY

17

FY

18

DPS (sen) Payout Ratio

Dividend

Per Share

7.95senFor FY2018

Dividend

Payout Ratio

60.0%From FY2018 onwards

Pay-out Policy of minimum 60% instituted from

FY2018 onwards

Although number of shares have grown, DPS

has grown to 7.95 sen to date

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Hartalega Share Price Performance - FY2018

0

1

2

3

4

5

6

7

1,000.00

1,100.00

1,200.00

1,300.00

1,400.00

1,500.00

1,600.00

1,700.00

1,800.00

1,900.00

2,000.00

Hartalega (RHS) FBMKLCI (LHS)

Share Price

+ 146%Over FY2018

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Most valuable glove company with market

capitalisation of RM20 billion as of 30th Mar

2018

Market cap appreciated by approx. 46 times

from RM436 million (IPO of RM1.80 adjusted

for bonus issues) to current market cap of

RM20 billion (as of 30th Mar 2018)

Hartalega commands a premium for its

healthy financials, sales growth, innovation

and productivity436 606

1,987 1,9812,902

3,623

5,116

6,9347,959

8,139

20,037

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18

Market capitalisation (RM mil)

Most valuable glove manufacturer

Market capitalization exceeding RM20 billion

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Industry Outlook

Healthy growth in 2019/2020

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Consistent growth in global consumption

Market outlook

64 6884 92 94 102110

122124140150148

160171180

194210

228246

265287

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018f

2019f

2020f

Global consumption of rubber gloves (bil pcs)World demand for rubber gloves grow at an

average of 6% to 8% per annum

Malaysia is the largest supplier of rubber

gloves to the world – 63% market share

Demand for glove is inelastic, a basic

necessity in healthcare and other sectors

that require hand protection

Global consumption growth will continue

stemming from increase from developing

nations where existing per capita

consumption is significantly lower than

developed countries

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276259 250

230 226208 201 198 197 185 180

163 156 153124 120

10690 88 83

67 66 5832 30

10 6 4 2

Gloves per capita consumption (pieces)

Market statistics show big disparity in per capita consumption between developed and developing nations

Countries with low per capita consumption of gloves that have huge population and high GDP growth indicate big

opportunities for demand growth for gloves

Market outlook

Attractive opportunities in high growth and highly populated developing countries

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Market outlook

Malaysia Big Four Global demand

Supply and demand remains healthy

Global consumption projected to grow more

than industry’s capacity expansion

Malaysia competitiveness relative to China

in glove production has improved due to

China’s government clamp down on

environmental compliance

Rubber glove expected to take market share

from PVC glove

PVC glove market size is about equal to

rubber glove

Growing Global


NR42%

NBR, 58%

NR,49%

NBR, 51%

NR,43%

NBR, 57%

NR,40%

NBR, 60%

Year 2014 Year 2015 Year 2016 Year 2017

Malaysia’s Export of Rubber Gloves (source MREPC)

Market outlook

Nitrile glove export in Malaysia continues to grow

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Hartalega NGC Status

Next generation integrated

manufacturing complex

NGC

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11,513 12,522

15,744

19,540

25,818

30,707

34,950

39,115

0

10,000

20,000

30,000

40,000

50,000

FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

Production output projection

Our strategy

15% p.a. growth via capacity expansion

Growth via addition of new capacity through construction of

new production lines

To date, 49 production lines are running at NGC. 4 out of 6

plants at NGC are in full operation

Construction of NGC plant 6 has commenced

Plant 51st line

commissioned

in August

Plant 6Target to start

operations in

1H 2019

Plant 7Target to start

operations in

2H 2019

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Antimicrobial Gloves

World’s First Non-Leaching

Antimicrobial Gloves

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Healthcare Associated Infections (HAI) are infections that patients get while

receiving treatment for medical or surgical conditions

USAAffected Patients 1.7 million

Deaths 99,000

Cost approx. USD 6.5 billion

EUAffected Patients 4.1 million

Deaths 37,000

Cost approx. EUR 7 billion

World’s first non-leaching antimicrobial gloves

What is Healthcare Associated Infections (HAIs)?

Source: Adapted from World Health Organization, Healthcare-Associated Infections Fact Sheet.

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The role of medical gloves

Centre of Disease Control and Prevention (CDC)

and World Health Organization (WHO)

recommends wearing medical gloves to reduce

risk of:

Blood and body fluid contamination of

healthcare workers’ hands

Microbial dissemination in the environment,

microbial transmission from healthcare

workers to patients and vice versa, as well

as among patients.

Gloves at current however is a passive barrier

protection against HAIs

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Antimicrobial Glove (AMG): An active approach in preventing HAIs

Contrary to conventional gloves, AMG antimicrobial

gloves can play an active role in reducing spread of

infections

Designed to kill microorganisms on the external side of

the glove quickly upon contact.

Active ingredient on the glove is a photosensitizer which

generates singlet oxygen when exposed to light.

This singlet oxygen oxidizes bacteria’s protein and lipid,

thus leading to death of microbes.

Photodynamic Reaction Leading to Cell Death

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The benefits of AMG

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Bactericidal efficacy of AMG

Microbe TypeAverage % Bacteria Killed

5 mins 10 mins 15 mins 20 mins

Enterococcus faecalis (VRE) Gram-positive 99.982 99.996 - 99.968

Enterococcus faecium Gram-positive 99.991 99.991 99.996 -

MRSA Gram-positive 99.988 99.998 99.999 99.997

Staphylococcus aureus** Gram-positive 99.999 99.993 - 99.994

Streptococcus pyogenes Gram-positive 99.946 99.970 99.988 99.996

Escherichia coli Gram-negative - - 99.030 -

Klebsiella pneumoniae Gram-negative - 96.471 - 97.747

** Further testing was conducted on Staphylococcus aureus at shorter contact time.

Bacteria kill rate (%) results recorded: 99.989% (1 min), 99.998% (2 mins) & 99.999% (5 mins)

Growing Global

……………………………………………………………………………………………………………………………………………………………………………….. Innovation Quality25Antimicrobial Gloves Video

https://www.youtube.com/watch?v=6_WsUHXFnr4

https://www.youtube.com/watch?v=6_WsUHXFnr4

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Investors Presentation 2018 - Fundamental Analysis · Growing Global 4 4 ...

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