March 24, 2011

HAIO - OSK Research maintains Sell on Hai-O, but ups TP to RM1.93

Stock Name: HAIO
Company Name: HAI-O ENTERPRISE BHD
Research House: OSK

KUALA LUMPUR: OSK Research said Hai-O's nine-month results for the period ended Jan 31, 2011 were within its full year forecast of RM27.2m.

The research house said on Thursday, March 24 that due to its poor multi-level marketing results, revenue plunged 60% to RM165m while net profit fell by an even wider 64.2% to RM20.3m.

'In tandem with the poorer results, YTD EBIT came in at 17.5% versus 19.5% in 9MFY10. Despite the weaker numbers, management says MLM sales have started to pick up.

'We raise our FY12 earnings forecast by 1.7% to RM32.6m to factor in a stronger RM against USD. Our TP is raised to RM1.93 from RM1.61 previously (based on 12x PE) as we roll over our valuation to FY12. Maintain SELL,' OSK Research said.

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