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*Hartalega – 3QFY25 results briefing*
Q: Volume outlook?
A: Frontloading activities will affect the volume until Apr or May 2025. Will see resumption of orders post that. US has been buying for 8 bil pieces per month in Jul – Sep 2024. And the volume has gone up to 10 bil pieces per month in Oct – Dec 2024. Hence there is an additional one-month capacity which means the volume can last until Apr or May 2025. Will have visibility on order resumption in Mar and Apr 2025. Expect lower utilisation at 70-75% for Jan – Mar 2025 (4QFY25) from 86% in 3QFY25.
Q: ASP trend?
A: Will see better picture after the frontloaded volume depletes.
Q: ASP gap between US and non-US markets?
A: USD2 difference. USD21/carton for US and USD18-19/carton for non-US. Chinese manufacturers’ ASP for non-US market USD15/carton.
Q: Raw material cost
A: Upstream players are rationalising the capacity and the raw material cost will not be tapering off.
Q: Hedging
A: Hedged USDMYR at RM4.3/USD1 for 2.5 months.
Q: Margin outlook
A: next quarter, seeing the orders softening as buyers frontloaded the volume. Margin could be under pressure in 4QFY25.
Q: Headcount and impact of higher min wage
A: 8k. to reduce to 7k in the next two quarters. Impact of higher min wage amounts to USD0.20/carton.
Q: Chinese competitors
A: They are expanding in Indonesia and other ASEAN countries. It is estimated to be around 30 bil pieces per annum, which is equivalent to the volume export to the US from China. Earliest it will be ready by mid-2026.
Q: proportion of sales to the US?
A: 63% in 3QFY25 vs 50% historically.
