Excel – http://1drv.ms/1gE19Yy
– Fair values:
– 5-Y DCF: 3.04 (Base) – 3.43 (Good).
– Buy Under: 2.51 – 2.83 (MOS: 18% – 28%)
– EY%: Buy below 2.40, sell above 3.18
– I think that HAIO is currently slightly undervalued.
– Due to decline in the purchasing power of consumers and margins erosion due to the weakening of Ringgit against USD, I think HAIO FY14 performance will be mediocre. However, because healthcare product is quite essential nowadays, the impact will be short term only. With its expansion to Indonesian market, HAIO will have greater potential, rather than just focus on Malaysia market.
– While I am positive on HAIO’s longer-term prospects as its MLM division is intensifying its product strategy by focusing on more "small ticket" items, which are affordable, the rise in operating cost and the depreciation of Ringgit would continue to affect their margins, going forward.
– I will continue to hold HAIO, and accumulate HAIO whenever possible.
Latest Financial – Q3 2014 Financial Report (26 Mar 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1576949
At the time of writing, I owned shares of HAIO.