Able Global in a good position to deliver stronger Q4 earnings, says TA Securities

KUALA LUMPUR: Able Global Bhd (AGB) is now better positioned to increase production and deliveries sustainably, allowing it to get back on track and report a stronger fourth quarter(Q4).

TA Securities Holding Bhd said the company's domestic plant has resumed with a full workforce in September and can now sustainably increase production to meet sales orders.

"With close to 100 per cent of AGB's on-site personnel fully vaccinated, AGB's plant has resumed to full workforce in September from 60 per cent workforce previously due to Covid-19 restrictions imposed by the government.

"Meanwhile, sales visibility remains healthy amid some shift between the exported countries.

"For example, AGB has increased shipment to regions that are reopening economic activities such as Indonesia, the Philippines and Africa, to offset sales weakness in countries that have been weakened due to imposition of lockdown such as Vietnam," it said in a note.

Meanwhile, the company's Mexican plant's condensed milk lines have received strong orders and are working towards breakeven in October, TA Securities added.

"Mexican plant's condensed milk lines have commenced since July 2021, where the company has been ramping up production corresponds to incoming solid orders from customers.

"The management expects condensed milk lines to achieve breakeven by October as utilisation rate reaches 30 per cent.

"Meanwhile, one evaporated milk line was made operational recently with the second line under commissioning and is expected to be ready by Q4.

"With all the lines estimated to be fully installed by end-FY21, the management aims to drive overall Mexican plant's utilisation rate to 30-50 per cent within the first year of operation and over 60 per cent in the second year of operation," it said.

TA Securities has maintained its "Buy" call on AGB with an unchanged target price of RM2.30.

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