HAIO – Fundamental Analysis (25 Jun 2015)

HAIO Analysis:-

Excel – http://1drv.ms/1LFoo0b

Notes – http://tinyurl.com/nr8hftv

My View:-

  • Valuation:
    • Absolute EY%:
      • Trailing:
        • FY15 (EPS: 0.154) – From 2.36 to 3.49 (Uncertainty Risk: LOW to MEDIUM)
        • R4Q (EPS: 0.154) – From 2.35 to 3.48 (Uncertainty Risk: LOW to HIGH)
      • Forward:
        • FY16 (EPS: 0.164) – From 2.51 to 3.72 (Uncertainty Risk: LOW to MEDIUM)
        • FY17 (EPS: 0.191) – From 2.93 to 4.33 (Uncertainty Risk: LOW)
      • EPS applied to reach the current stock price (2.23): 0.133
    • Simple Yield Valuation:
      • FY15-EY%: 6.9%
      • FY15-DY%: 6.7%
    • Valuation of HAIO is quite attractive, and its dividend yield is also attractive.
  • Even though FY15 revenue dropped 11.7% (FY15: 240m; FY14: 253m), its past 4 quarterly results has been increasing.
  • Next financial year will remain challenging in view of weakening domestic purchasing power and high costs of living, resulting consumers more cautious in spending. Furthermore, weakening of MYR against USD currency will increase the cost of import purchases. Net income dropped 30% yoy.
  • In FY15, CapEx increased 137% if compare to FY14. The retail division has been looking for high traffic location for its new outlets and will enhance its CIS image by refurbishing its existing outlets.
  • 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 and accumulate HAIO as I believe that HAIO has the ability to overcome the challenges ahead.

Latest Financial – Q4 2015 Financial Report (24 Jun 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/4782145

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

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