HAIO – Fundamental Analysis (27 Sept 2014)

HAIO Analysis:-

Excel – http://1drv.ms/1DHEUdF

My View:-

– Fair values:
  – Absolute EY%:
    – Trailing:
      – FY14 (EPS: 0.205) – Fair value 2.71 (Fair Value Uncertainty: HIGH)
      – R4Q (EPS: 0.193) – Fair value 2.56 (Fair Value Uncertainty: HIGH)
    – Forward:
      – FY15 (EPS: 0.189) – Fair value 2.51 (Fair Value Uncertainty: HIGH)
      – FY16 (EPS: 0.203) – Fair value 2.69 (Fair Value Uncertainty: HIGH)
    – EPS applied to reach the current stock price (2.57): 0.194
  – HAIO valuation is fully valued now.
  – Looking at chart, HAIO has been moving in the range from 2.2 to 2.8. Besides, HAIO has a very strong support at 2.3 and 2.2. So, technically, I can accumulate HAIO.
– Due to decline in the purchasing power of consumers and margins erosion due to the weakening of Ringgit against USD, I think HAIO FY15 performance will be mediocre (or just slightly higher than FY14). 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 reckon that the group is in right business direction for its MLM strategy of focusing on "small ticket" or "repetitive-consumer" items to boost future sales, we foresee the group’s strategy may take longer time to yield desirable results to cushion the current declining sales in its "big ticket" item.
– I will continue to hold HAIO, and accumulate HAIO whenever possible.

Latest Financial – Q1 2015 Financial Report (24 Sept 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1747925

At the time of writing, I owned shares of HAIO.

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