Hartalega
ESG 2.0: Defending an above
average scoring
MYR4.28 TP based on an unchanged 3x CY26E P/B peg. Reiterate BUY.

We revisit HART’s ESG disclosures post release of its FY24 Annual and
Corporate Governance Reports and have assigned an above average ESG
score of 64 (out of 100), which is higher than its previous ESG score of 61
when first introduced in FY22. We maintain our earnings forecasts and
MYR4.28 TP based on an unchanged 3x CY26E P/B peg. Reiterate BUY.
Some headwinds were noted…
HART's overall ESG score of 64 is above average, exceeding its sector peer,
Top Glove (TOP MK, HOLD, CP: MYR1.08, TP: MYR1.08), which is rated at
56 (above average). HART’s score experienced some drag from the rising
trend in carbon emissions and total waste generated intensity. Average
training hours per employee also decreased to 13 hours from 19 hours.
Additionally, despite a -31% reduction in Directors' remuneration, the
Board's salary as a percentage of core net profit increased to 11.6% due to
a lower core net profit arising from higher costs related to the
decommissioning of the Bestari Jaya facilities.