This is the summary and discussion of Hartalega’s last five years and latest five quarters of income statements.
Five-Year Financial Performance Review
Reviewing Hartalega’s financial trajectory over the past five fiscal years (FY2022 to FY2026), the core narrative is a complete cycle from demand surge, to deep correction, and then to a gradual recovery. FY2022 represented the peak of the company’s historical performance, with annual revenue reaching a record MYR 7.888 billion, gross profit at MYR 4.795 billion, and net profit at MYR 3.234 billion, translating to a net margin of 41.0%. This extraordinary growth was primarily driven by the explosive demand for gloves during the COVID-19 pandemic, which pushed average selling prices up by more than 70% and lifted capacity utilisation to historic highs. However, the rapid expansion of the industry – notably by Chinese manufacturers – combined with the swift normalisation of the pandemic, caused the supply-demand balance to deteriorate sharply within a short period.
In FY2023, the industry collapsed from its peak. Hartalega’s revenue plunged 69.45% to MYR 2.410 billion, gross profit tumbled from MYR 4.795 billion to just MYR 319 million, and the gross margin fell to 13.2%. The company recorded a net loss of MYR 235 million. This reversal was driven by a massive global oversupply of gloves, compounded by a sharp drop in ASPs – from more than USD 70 at the peak to roughly USD 27 by early 2022, and further down to USD 22 in 2023. Many producers saw capacity utilisation fall below 50%.
FY2024 marked the trough of the cycle. Revenue declined a further 23.7% to MYR 1.838 billion, gross profit was razor-thin at MYR 156 million, and the gross margin compressed further to 8.5%. However, at the net level, the company turned marginally positive with MYR 13 million, signalling the start of a bottoming process. Entering FY2025, Hartalega delivered a strong rebound. Revenue increased 40.7% year-on-year to MYR 2.586 billion, gross profit recovered to MYR 244 million, and the gross margin improved to 9.4%. Net profit reached MYR 75 million, an increase of approximately 476% year-on-year, providing a clear signal of recovery.
FY2026 was a phase of profitability-driven recovery. Although full-year revenue declined 17.4% year-on-year to MYR 2.135 billion, net profit continued to grow, reaching MYR 103 million – a 38.2% increase from FY2025. More importantly, the pre-tax profit margin expanded to 5.5% and the full-year net margin rose to 4.8%. This indicates that the company’s profitability is decoupling from top-line scale and is increasingly supported by structural improvements in operational efficiency. Management attributed this to production efficiency gains, deeper automation, and cost optimisation initiatives, with the full commissioning of Plant 9 being a key operational driver.
Latest Five Quarters Perspective
Looking at the quarterly data for FY2026 provides a clearer view of Hartalega’s profit recovery trajectory. From the second quarter of 2025 (Q1 FY2026) through the first quarter of 2026 (Q4 FY2026), the data shows a pattern of moderating revenue but expanding net profit.
Quarterly revenue gradually declined from MYR 612 million in Q1 FY2025 (March quarter 2025) to MYR 515 million in Q4 FY2026 (March quarter 2026). This reflects persistent ASP pressure and the translation effect of a stronger Malaysian ringgit against the US dollar. However, over the same period, net profit rose from MYR 14.5 million to MYR 40.5 million. In Q4 FY2026, net profit jumped 179% year-on-year, well above market expectations. The net margin expanded from 2.4% to 7.9%, demonstrating significant marginal profitability improvement.
The quarterly sequence (using the company’s reporting quarters, where Q1 FY2026 ended June 2025, etc.) is as follows:
Q1 FY2025 (ended June 2024): Revenue MYR 612 million, net profit MYR 14.5 million, net margin 2.4%
Q2 FY2025 (ended Sep 2024): Revenue MYR 553 million, net profit MYR 12.6 million, net margin 2.3%
Q3 FY2025 (ended Dec 2024): Revenue MYR 540 million, net profit MYR 17.9 million, net margin 3.3%
Q4 FY2025 (ended Mar 2025): Revenue MYR 527 million, net profit MYR 31.7 million, net margin 6.0%
Q1 FY2026 (ended Jun 2025): Revenue MYR 515 million, net profit MYR 40.5 million, net margin 7.9%
The Q4 FY2025 and Q1 FY2026 results were particularly strong. Even though revenue in Q1 FY2026 fell 15.7% year-on-year (due mainly to ringgit strength and ASP pressure), net profit surged 179% to MYR 40.5 million. EBITDA grew 45% quarter-on-quarter to MYR 75 million, and the pre-tax margin expanded to 5.5%. These results were driven by strict cost control, significant operational efficiency gains from automation, and the company’s ability to raise ASPs modestly to the USD 26–28 per 1,000 pieces range.
Strengths, Risks, and Outlook
The foundation of Hartalega’s profit recovery is a combination of improving underlying demand and structural efficiency gains. Global glove demand has largely returned to pre-pandemic levels, with a structural annual growth rate of 7–9%. Hartalega’s capacity utilisation, excluding temporarily idled lines, has risen above 96%. The newly commissioned Plant 9 has an annual capacity of 4.7 billion gloves, and the company is also restarting and upgrading Plant 3 (4.5 billion pieces). Ongoing automation and digitalisation initiatives continue to reduce unit costs.
Nevertheless, significant challenges remain. The industry is still burdened by chronic overcapacity. Chinese competitors are setting up production facilities in Southeast Asia to circumvent US tariffs, and low-end glove supply from Asia and other emerging markets continues to flood the market. This keeps ASP recovery sluggish and competition intense, especially outside the US. Furthermore, the Malaysian ringgit appreciated more than 7% against the US dollar over the past year, which directly reduces reported revenue in ringgit terms – explaining part of the year-on-year revenue decline.
Analysts remain cautiously optimistic but highlight ongoing headwinds.
TA Securities maintains a “Hold” rating, noting that competition remains intense and volume recovery will take time.
Kenanga Research, while maintaining an “Outperform” call, lowered its FY2026 earnings forecast by approximately 26%, citing difficulty in passing through costs to customers.
BIMB Securities explicitly notes that while global glove demand has recovered, higher volumes have not translated into higher value, as the industry continues to face excess capacity, price pressure, and a stronger ringgit.
In conclusion, Hartalega has demonstrated clear structural improvement in profitability, becoming the first among major glove makers to show a sustained margin recovery. However, whether the company can break out of the long-term ASP suppression and achieve simultaneous growth in revenue and profit remains the key variable that the market will be closely watching over the next 12 to 24 months.
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