Hai-O is a stock that really catches my eye when I am searching for a value stock in Bursa Malaysia. Hai-O engages in the wholesale and retail of Chinese and western wines, herbs, and medicines in Malaysia. It operates in five segments: Wholesale, Multi Level Marketing, Retail, Manufacturing, and Others. MLM so far is the main driver of the company, contributing more than 70% of the total turnover and profit of the company.
For the 3Q (31/01/2008) financial results, Hai-o has chalked up profit after tax of RM29.5 million and the EPS stands at 40.07, a growth of more than 100% compared to RM14.3 million achieved in 3Q 2007.
Based on her historical trend, the company is expecting to announce 4 Q result sometime in June 2008. If the company manages to maintain the same result as it has achieved in 3 Q 2008, the estimated annualise EPS will stand at 58.7 sen. By applying P/E 8 , the share should worth at least RM4.60. The company cash stood at RM47.7 million as at 31 January 2008 and has zero borrowing.
For dividend payment, the company has paid an interim dividend of 8 sen per share in March 2008. If the company can declare final dividend of 20sen per share for this financial year, the total dividend will stand at 30sen. Based on the current share price of RM3.80, the dividend yield will translate at 8.5% which is much better than FD offered by financial institution in Malaysia.
My only complain is that the company share is illiquid.
Looking to buy 10,000 shares at below 3.70 when market open on Monday 26/03/2008.
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