Haio has just announced its results for QE30/4/2010. Its net profit dropped by 21% q-o-q or 10% y-o-y to RM14.3 million while its turnover declined by 25% q-o-q or 26% y-o-y to RM99 million. The decline in both sales & net profit was attributable to lower recruitment of mew members due to more stringent rules in lines with new regulations set out by the government.The company hopes to overcome the decline in sales by increasing its range of health supplement & skincare products.
Table: Haio's 8 quarterly results
Chart 1: Haio's 21 quarterly results
Valuation
Haio (closed at RM4.12 last Friday) is now trading at a PER of 12 times (based on last 4 quarters' EPS of 35 sen). With declining top-line and bottom-line, Haio might even trade at single-digit PER until the situation stabilizes.
Technical Outlook
Haio is still in an uptrend. However, the negative crossover of the MACD is signaling further decline in Haio's share price. It may find support at the 50-day SMA line at RM3.35.
Chart 2: Haio's daily chart as at June 25, 2010 (Source: Tradesignum)
Conclusion
Based on the poor financial performance, I would rate Haio a SELL ON STRENGTH.
Hi Alex ,
ReplyDeletePls comment on FPI .
thanks
Please link to my blog. Thanks!
ReplyDeletewe could share investment information.
http://special-situation-investing.blogspot.com
Hi Pan,
ReplyDeleteFPI is a manufacturer of speakers, home theater systems, and electronic components such as capacitors, printed circuit boards, and smart cards. Its results for FY2010 is satisfactory, where it reported a net profit of RM36 million on sale of RM580 million. For FY2009, it reported a net profit of RM13 million on sale of RM544 million. EPS for FY2010 was 15.4 sen. The question to ask: Can FPI maintain this level of profitability?
Technically, FPI has recently tested the long-term downtrend line [connecting the peak in 1996 & 2000]. That downtrend line resistance is at RM1.17. My take on FPI is that the stock has made a temporary top & it needs to consolidate its sharp rise from RM0.30 in early 2008 to its recent high of RM1.17. This top could turn out to be a significant top that might not be revisited soon. That would however depend on FPI's financial performance over the next few quarters. In this respect, I am very weary when analysts & investors extrapolate company's future performance based on the results for the last 4-5 quarters. After the near collapse of the global financial system, many survivors amongst us have enjoyed abnormal profit that may not be sustainable. This profit normalization would be even more severe if some large economies (such as the US) were to suffer a double dip.
Hi Eclectic Investor,
ReplyDeleteThank you for your invitation & suggestion. I have put off link exchange until I have decided on the next phase of development of my blog.