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Hai-O advances on firm 4Q earnings
Jun 30, 2017
Source: The Edge
 

KUALA LUMPUR (June 30): Hai-O Enterprise Bhd advanced in early trade this morning after it posted a 63% rise in earnings in its fourth quarter of financial year 2017 (4QFY17), as both its wholesale and multi-level marketing divisions performed better.

At 9.04am, Hai-O rose 18 sen to RM4.08 with 356,300 shares traded.

Net profit for the three months ended April 30 came in at RM18.25 million compared with RM11.18 million a year earlier, while revenue grew 34% to RM118.37 million from RM88.15 million, its Bursa Malaysia filing yesterday showed.

The group proposed a final single tier dividend of 11 sen per share for FY17, which brings its total payout for the year to 16 sen, a sen higher than FY16.

The group expects to raise between RM35.58 million and RM47.87 million from the placement of shares to parties to be identified later.

Meanwhile, AffinHwang Capital Research has maintained its “Buy” rating on Hai-O Enterprise Bhd at RM3.90 with a higher target price of RM4.92 (from RM4.22) and said Hai-O’s FY17 core net profit of RM 59.3 million came within house andconsensus expectations, driven by the multi-level marketing (MLM) segment as membership continues to grow strongly.

In a note today, the research house said it believes the MLM segment still has more room to grow.

“We reiterate our Buy call with a higher target price of RM 4.92 as we roll forward our valuation to CY18E.

“We are positive on Hai-O’s management quality and its ability to deliver growth going forward, and we reiterate our BUY call on the stock.

“Key risks to our call: i) loss of distributors in the MLM division; ii) lack of new exciting products to enhance growth; and iii) further weakness in the wholesale/retail division,” it said.