HAIO – Fundamental Analysis (17 Dec 2014)

HAIO Analysis:-

Excel – http://1drv.ms/16sc0Su

My View:-

– Valuation:
  – 5Y DCF:
    – Good Scenario: 2.67 (Fair value uncertainty: MEDIUM)
    – Base Scenario: 2.34 (Fair value uncertainty: MEDIUM)
    – Bad Scenario: 2.06 (Fair value uncertainty: VERY HIGH)
    – Ugly Scenario: 1.8 (Fair value uncertainty: VERY HIGH)
    – I will select bad and base scenario for HAIO valuation.
  – Absolute EY%:
    – Trailing:
      – FY14 (EPS: 0.205) – Fair value 2.71 (Fair Value Uncertainty: MEDIUM)
      – R4Q (EPS: 0.176) – Fair value 2.33 (Fair Value Uncertainty: MEDIUM)
    – Forward:
      – FY15 (EPS: 0.148) – Fair value 1.96 (Fair Value Uncertainty: VERY HIGH)
      – FY16 (EPS: 0.16) – Fair value 2.12 (Fair Value Uncertainty: HIGH)
    – EPS applied to reach the current stock price (2.19): 0.165 
  – Both models show that HAIO valuation is not attractive.
– Despite the current slump in its earnings, coupled with the possibility of longer-than-expected effect from the strategy shift, HAIO’s attractive dividend will be the main catalyst for the stock.
– I will continue to hold HAIO as I believe that HAIO has the ability to overcome the challenges ahead.

Latest Financial – Q2 2015 Financial Report (16 Dec 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1827421

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


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