THE easing of the price of butadiene, a key material of nitrile, will boost the profitability of Hartalega Holdings Bhd next year, says MIDF Research Sdn Bhd.
According to a research by the MIDF, nitrile latex makes up 50% of the production cost for Hartalega.
“The operating environment for glove producers has improved substantially in the last few months, contributed by the easing in the price of the commodity.
“With its strong operation cash flow, we are confident that Hartalega is capable of sustaining the attractive payout ration in the foreseeable future,” it added.
MIDF has upgraded to a “buy” call for Hartalega as it confident about its ability to sustain growth and profitability.
Source: Bernama