Affin Starts Hartalega At Buy, Target MYR7.46

         Affin Investment initiates Hartalega Holdings (5168.KU) at Buy with a price target of MYR7.46, pegged to a target P/E multiple of 13X on 2012 forecast EPS. Hartalega Holdings is the world's largest producer of synthetic gloves. The house says, on average, the company's margins are almost double of its peers at 30%. It adds, "the shift in demand to nitrile gloves will likely gain momentum, triggered by the now-cheaper ASPs (average selling prices) and sustained by the steadier pricing schedule." But the house notes the strengthening MYR vs the USD is a key risk for the company, as it pares down absolute revenue. "However, the company is spared from the volatility of latex prices, as price increases for NBR (nitrile rubber) are steadier and at a slower pace." The stock is unchanged at MYR5.70.