Hartalega Holdings Berhad has demonstrated promising signs of recovery with improvements in its financial performance and operational efficiencies, according to reports by Kenanga Investment Bank (Kenanga), Maybank Investment Bank (Maybank), MIDF Amanah Investment Bank (MIDF), and RHB Investment Bank (RHB).

The company's first quarter for Fiscal Year 2025 (1QFY25) revealed a significant turnaround, with a core net profit of MYR33 million, a stark contrast to its previous loss, and improvements in sales volume and plant utilisation. Industry dynamics show a gradual end to the excess supply, with a projected rebound in glove demand driven by restocking activities and a stabilising global market.

Maybank maintains a BUY recommendation for Hartalega, setting a target price of MYR4.28, highlighting that the company is on track for stronger earnings in the upcoming quarters due to increased sales and improved operational efficiencies.

RHB also maintains a BUY stance, adjusting its target price to MYR3.55, noting a 34% upside potential based on the positive recovery trajectory and improved industry dynamics.

Kenanga retains an UNDERPERFORM rating with a target price of RM2.33, citing concerns over ongoing industry overcapacity and competitive pressures despite the recent financial improvements.

MIDF has downgraded its rating to NEUTRAL with a revised target price of RM2.52, reflecting the slower-than-expected profit margin recovery and persistent competitive pricing pressures.

Despite this, concerns remain about the sustainability of profit margins and competitive pressures in the rubber glove sector.