HAIO: Earnings Remained Strong

Result Update

For QE31/10/2020, Haio's net profit was relatively unchanged q-o-q but rose 41% y-o-y to RM10.4 million while revenue dropped 7.2% q-o-q or 3.3% y-o-y to RM66 million. Overall revenue dropped q-o-q mainly attributable to lower revenue generated from the MLM division as members recruitment and renewals have normalized and business activities and delivery service in East Malaysia were impacted by the third wave of COVID-19 pandemic outbreak. Wholesale revenue was maintained while retail revenue rose 4.2%. Profits was maintained partly due to one-off gain from the disposal of vintage tea amounting to RM 0.8 million.


Table: Haio's last 8 quarterly results 


Graph: Haio's last 62 quarterly results

Financial Position 

Haio's financial position as at 31/10/2020 is deemed healthy with current ratio at 4.1 times and total liabilities to total equity at 0.19 time.

Valuation

Haio (closed at RM2.32 last Friday) is trading at a trailing PE of 17.8 times (based on last 4 quarters' EPS of 13 sen). Haio paid out dividend totaling 8 sen in the past 4 quarters- giving the stock a decent dividend yield of 3.4%. Based on these, Haio is deemed fairly valued.

Technical Outlook

Haio seems to have on a recovery path, after its share prices exhibit higher "peaks" and "higher troughs" since Mar this year. Weakly MACD is now above the zero line, which indicates the share prices are likely to go into an uptrend.


Chart 1: Haio's weekly chart as at Dec 18, 2020 (Source: Malaysiastock.biz)


Chart 2: Haio's monthly chart as at Dec 18, 2020 (Source: Malaysiastock.biz)

Conclusion

Based on steadier financial performance, healthy financial position and mildly positive technical outlook, Haio is a good stock for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.