Haio- bottom-line jumped due to gain on disposal of land

Results Update

For QE31/10/2012, Haio's net profit increased by 57% q-o-q or 105% y-o-y to RM16 million while revenue increased by 8% q-o-q or 17% y-o-y to RM66 million. Pre-tax profit increased by RM6.7 million q-o-q due mainly to higher sales in all 3 divisions (wholesale, retail & others) as well as gain on disposal of one vacant land of RM4.8 million. If the exceptional gain is excluded, the pre-tax profit only increased by RM1.9 million- continuous improvement, not an eye-popping jump.


Table: Haio's last 8 quarterly results


Chart 1: Haio's last 31 quarterly results

Valuation

Haio (at RM2.23 as at 12pm) is now trading at a PE of 11 times (based on last 4 quarters' EPS of 20 sen, excluding the exceptional gain last quarter). At this PE, Haio is deemed fairly valued.

Techncial Outlook

Haio has been consolidating in a triangle for the past 10 months. It could be breaking to the upside of the triangle at RM2.20. For the breakout to be convincing, it needs higher volume.


Chart 2: Haio's weekly chart as at Dec 20, 2012_11.30am (Source: Quickcharts)

Conclusion

Based on satisfactory financial performance, reasonable valuation & potentially bullish technical outlook, Haio could be a good BUY for long-term investment.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Haio.