Hai-O’s first half of 2018 net profit within expectations

KUCHING: Hai- O Enterprise Bhd’s ( Hai- O) first half of 2018 (1H18) net profit has come in within analysts’ expectations, as has the group’s interim dividend per share ( DPS).

In a filing on Bursa Malaysia, Hai- O reported that for 1H18, the group registered higher pre-tax profit of RM51 million, as compared to RM32.9 million, representing an increase of 54.8 per cent for the corresponding period of the preceding year.

Hai- O’s 1H18 net profit of RM39.3 million came in within both of the research arm of Kenanga Investment Bank Bhd’s ( Kenanga Research) and consensus expectations at 47 per cent of full-year forecasts.

The group’s interim DPS of six sen for 1H18 was also within Kenanga Research’s expectation as circa 70 per cent of dividend pay- out typically falls in the fourth quarter (4Q).

On the out look, Kenanga Research highlighted that the group’s multi-level marketing ( MLM) continued its momentum with its 25th year anniversary grand sales promotion and higher sales volume from newly launched fashion and beauty care range of products under the brand of “Infinence”.

“Moving forward, the MLM division will continue to develop more products, especially on lifestyle related range of products and beverage products.

“As Chinese New Year (CNY) festive season is approaching, the wholesale and retail divisions will carry out an extensive CNY promotion,” the research arm said.

Nonetheless, the research arm expected the earnings momentum to be limited by Hai- O’s higher promotion costs and the group’s other operating divisions, including wholesale and retail divisions are still susceptible to unfavourable forex.

All in, Kenanga Research maintained ‘market perform’ on Hai- O with a higher target price of RM5.60 per share as the research arm rolled- over its valuation year to financial year 2019 estimates.