Opinion

Story : Malaysia Hartalega Company & Founder Kuan Kam Hon – USD 5.2 Billion Net Worth & Share Price Could Reach RM24.66

Who Is The Owner of Hartalega ?

Kuan founded Hartalega Holdings in the early 1980s and controls 49.3% of the company. Hartalega plans to increase its production capacity from 22 billion to 42 billion gloves a year by 2020

Kuan Kam Hon was a high school drop-out who began his career in building and construction in 1969.

He worked at his father’s company building high-end homes around Kuala Lumpur.

He set off on his own in 1978 and started Timol Weaving, a manufacturing business that made woven labels and badges.

Founded in 1981, Hartalega Holdings is the world’s largest and fastest maker of nitrile gloves, which it exports to 40 countries.

He is now a mentor and spokesman, leaving operations to his two sons. He shares his wealth with his brother Kuan Kam Peng.

Kuan Kam Hon saw the need for rubber gloves during the early years of the AIDs epidemic.

At the time, health-care workers and others were increasingly using the gloves to protect themselves against the virus and other infectious diseases. So Kuan turned his stagnating woven-label and badge manufacturing plant into a maker of latex gloves.

The decision has made Kuan, 66, a billionaire. His Kuala Lumpur-based company, Hartalega Holdings Bhd., has soared 56 per cent this year, reaching an all-time high Wednesday. Kuan and his family own 55 per cent of the company. He has never appeared on an international wealth ranking.

“He is very involved in the installation and design of equipment, in the day-to-day production,” said Ang Kok Heng, Kuala Lumpur-based chief investment officer at Phillip Capital Management Sdn., who has known Kuan since Hartalega’s initial public offering in 2008.

“He is the person who is everywhere in the factory.”

Hartalega : Malaysian Kuan Kam Hon Becomes Billionaire Making 45,000 Gloves An Hour

Hartalega—the company’s name is a combination of two Malay words that mean “relief assets”—is now the world’s biggest synthetic-glove maker, and one of its most efficient. A robotic system that mimics the human hand motion of stripping gloves off molds has helped it reduce costs and make its production lines some of the fastest in the industry, churning out as many as 45,000 gloves an hour, according to the company.

Hartalega : ‘Higher Margins’

Hartalega’s earnings before interest, taxes, depreciation and amortisation margin, was almost 34 per cent in the fourth quarter of its financial year ended March 31, about double its competitors’, including Malaysia-based Top Glove Corp. Bhd.

READ ALSO  Malaysia Hartalega Stock Will Continue To Rise : Glove Supply Will Not Meet Demand In Next 3 Years

“He enjoys higher margins because of low raw material costs, low usage of materials, higher productivity and lower labor requirement,” said Ang, who helps manage US$428 million (RM1.4 billion) at Phillip Capital, including investments in Hartalega. “They can produce more gloves per line, which other glove companies cannot do.”

Hartalega Has Six Plants That Can Produce 13.6 Billion Gloves A Year

Hartalega has six plants that can produce 13.6 billion gloves a year, according to company reports, and is spending as much as RM1.9 billion to build a manufacturing complex with 72 production lines by 2021. The new lines will produce an additional 28.5 billion gloves a year, the company said.

Hartalega Will Produce An Additional 28.5 Billion Gloves A Year

Kuan started working in 1969 at his father’s property development company, Kuan Yen & Sons, building high-end homes in Kuala Lumpur and its suburbs. In 1978, he made his foray into manufacturing by setting up Timol Weaving Sdn., a maker of woven labels and badges. He decided to venture into rubber glove manufacturing when the recession in the 1980s “coincided with the end of the building and weaving businesses,” his son, Mun Leong, said in the e-mail.

Hartalega Invested In Nitrile Gloves

In 2002, Hartalega invested in the research and development of thin nitrile gloves that can be used by health-care professionals and patients allergic to rubber protein.

“At the time, nitrile gloves were chiefly used in industrial applications and not in the medical sector due to their heavy weight and thickness, which was a hindrance for medical practitioners in the examination of patients,” said the billionaire’s 37-year-old son, Kuan Mun Leong, who is managing director of Hartalega. “Nitrile gloves are a necessity as there are people who are allergic to rubber protein.”

Kuan introduced the world’s first 4.7-gram nitrile glove that bore the elasticity and softness of natural rubber, without the protein allergy risk. The lightest nitrile glove that Hartalega currently produces weighs 3.2 grams, said its managing director.

Kuan Kam Hon Net Worth

Kuan has a net worth of at least US$ 5.2 billion, based on the value of Hartalega shares and warrants held by him and his family, as well dividend income since 2008, according to the Bloomberg Billionaires Index. The Kuan family declined to comment on their wealth.

READ ALSO  Baby Selling In Malaysia Involving High Profile Individuals, And Why People Do It

“We would prefer not to speculate on this,” the billionaire’s son, Mun Leong, said in an e-mail to Bloomberg News.

The patriarch owns his shares through holding companies Hartalega Industries Sdn. and Budi Tenggara Sdn., according to the company’s latest annual report. His two sons also directly own shares in the glove maker.

 Handing Over To His Sons : Kuan Mun Leong & Kuan Mun Keng

Kuan stepped down as managing director in November while remaining executive chairman, paving the way for his son, Mun Leong, to helm the company. The younger Kuan, who holds a mechanical engineering degree and an MBA, joined Hartalega’s engineering department in 2001, according to the company’s annual report. The patriarch’s older son, Kuan Mun Keng, 38, a certified practicing accountant, is executive director at the company and oversees sales and marketing as well as corporate finance.

“Now, he is slowly handing over to his sons,” Phillip Capital’s Ang said.

Kuan Kam Hon @ Kwan Kam Onn was appointed as Executive Chairman and Managing Director on 7 May 2007. He stepped down as Managing Director on 16 November 2012, and continues to play an integral role in the Group as Executive Chairman. Kuan Kam Hon is primarily responsible for the overall business, strategic planning and entire operations of the Group, including research and development.

Hartalega 3rd Most Valuable Company In Malaysia – RM 70.27 Billion Market Capitalisation

Third-most valuable company on the local exchange with a market capitalisation of RM70.27 billion, ahead of Public Bank Bhd at RM64.29 billion, but slightly behind Top Glove valued at RM72.67 billion.

Source : The Malaysian Reserve

Hartalega Target Price : RM 24.20

Meanwhile, CGS-CIMB Research analyst Walter Aw raised the glove maker’s target price to RM24.30 (from RM20), pegged to an unchanged 41 times calendar year of 2021 P/E (1SD) above its five-year mean.

“Backed by its industry-leading margins, we think Hartalega will continue to benefit from the current favourable operating environment for glove makers, as a vaccine for Covid-19 may be some time away,” he said.

Hartelega Earnings Assumption For FY21-FY23F By 50% to 120%

READ ALSO  Coverage Pick : Malaysia Top 10 Cutest Couple

Public Investment Bank Bhd analyst Chua Siu Li said the research house raised its earnings assumption for FY21-FY23F by 50% to 120% to account for the higher average selling price (ASP) and subsequently raised target price to RM21.70 as well as maintained a ‘neutral’ call on the sector.

“Hartalega will be raising its ASP by 30% q-o-q in 2QFY21 and 3QFY21. With that, we adjust our earnings forecast for FY21-FY22F by 51%-120% to account for the ASP hike in the coming months.

“We also highlight that the nitrile butadiene prices are expected to trend higher given the tight supply, however, we believe the increase in cost can be sufficiently covered by the rise in ASP,” said the analyst.

Besides, Kenanga Investment Bank Bhd also raised its target price to RM24.66 (from RM22.30) based on an unchanged 43 times CY21E revised earnings per share as it reiterates ‘outperform’ on Hartalega.

Its analyst Raymond Choo Ping Khoon raised Hartalega’s FY21E/FY22E net profit by 10% or 11% after imputing higher ASP.

“We like Hartalega for its solid management, constantly evolving via innovative products development, and its booming nitrile gloves segment,” Choo noted.

Hartalega RM 219.72 Million Revenue – 134% Jump In Net Profit

To recap, Hartalega reported a 134% jump in net profit in the first quarter result ended June 30, 2020 (1QFY21) to RM219.72 million as revenue rose on higher rubber glove sales volume and ASPs.

Source : The Edge

Kuan Kam Hon Net Worth Jump 130% From RM 9.14 Billion To RM 25 Billion

The king of the hill is Kwan Kam Hon, the founder, executive chairman and managing director of Hartalega Holdings Bhd. Kwan, 73, owns a 49.5% stake in the largest nitrile glove maker in the world and has seen his net worth breach the RM20 billion level to hit a high of RM25 billion — a 130% jump from RM9.14 billion at the end of last year. The company’s share price has risen 122.6% year to date.

Story : Malaysia Top Glove Company & Founder Lim Wee Chai – USD 4.6 Billion Net Worth & Share Price Could Reach RM77.60

Story : Malaysia Supermax Corp Company & Founder Stanley Thai Kim Sim – USD 1.1 Billion Net Worth & Share Price Could Reach RM24.19

3 Comments

3 Comments

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    five × five =

    Most Popular

    To Top