Bloomberg - HAIO:MK
Yahoo - 7668 .kl
Webpage - https://www.hai-o.com.my/
Yahoo - 7668 .kl
Webpage - https://www.hai-o.com.my/
Company
Profile
HAIO established in
1975 and has since become an establish household name offering wide range of
complementary medicine (TCM), medicine tonic as well as wellness, beauty and
healthcare products and clinical services. HAIO have business presence
nationwide with 57 retail chain stores and franchises, 37 Multi-Level-Marketing
(MLM) branches, stocklists and sales points, and 2 GMP manufacturing plants
across Malaysia.
HAIO had joint venture with
world renowned Beijing Tongrengtang since 2002 to offer TCM consultation
services and high quality herbal medicines to public.
1) Operating Segment
HAIO consists of 3 main
reporting segments as follow:
|
Segment
|
% 2019 Revenue
|
Asset Turnover
|
Return on Asset
(%)
|
% 2019 CAPEX
|
|
Multi-Level-Marketing
|
68.48
|
1.59
|
33.51
|
48.57
|
|
Wholesales
|
17.96
|
0.35
|
38.13
|
27.07
|
|
Retail
|
12.35
|
1.20
|
2.73
|
2.71
|
|
Non
Reportable segment
|
1.21
|
0.11
|
4.10
|
21.65
|
From 2019 annual
report, Multi-Level-Marketing (MLM) segment is producing the most revenue for
HAIO in 2019, 68.48 % of 2019 are from Multi-Level-Marketing segment. MLM
segment had high asset turnover and return on asset hence it is not surprise
most of the capital expense, CAPEX, for the year 2019 go to this segment.
(48.57 % of 2019 CAPEX).
HAIO had invested RM
8,296,000, 2.53% of 2019 revenue into CAPEX. RM 1,796,000 was invest into other
non-reportable segment which only generate RM 3,980,799 revenue over the year
of 2019 (45% of revenue generate from others segment is invest back into the
segment)
|
PROS:
|
|
è 48.57 % of 2019 CAPEX go to MLM
which has high Asset turnover ratio and return of asset.
|
|
CONS:
|
|
è
21.65 % of 2019 CAPEX go to
non-reportable operating segment which is not the main operating segment of
HAIO
è
45% of revenue generate from
non-reportable segment is invested back into the segment.
|
Financial
Statement
HAIO investment
properties had decrease from RM 55,949,690 (2018) to RM 45,658,791 (2019),
18.39 % decrease. It is mainly because the decrease in the value of the
freehold and leasehold land held by HAIO. However the net rental income had
increase from RM 1,640,616 to RM 2,723,831, 66.02% increase.
The trade and others
receivable of HAIO has decrease from RM 31,951,966 to RM 21,783,945, 31.82%
decrease and the trade receivable past due also decrease from RM 3,257,059 to
RM 2,180,565, 33.05 % decrease. The decrease of the trade and others receivable
is mainly due to the decrease in sales from RM 461,969,489 to RM 328,406,809,
28.91% decrease in sales.
HAIO cash and cash
equivalents had also decrease from RM 68,674,442 to RM 53,792,063, 21.67%
decrease.
|
PROS:
|
|
è 66.02% increase of net rental
income.
|
|
CONS:
|
|
è
28.91% decrease in revenue.
è
21.67% decrease in cash and cash
equivalents
|
HAIO had low loans and
borrowing which is RM 289,000 in 2019. In 2019 HAIO had contract liabilities
which is revenue recognised overtime during the membership period expected to
recognised as revenue over the perios of 3 years to 1 years.
|
PROS:
|
|
è HAIO had low loans and borrowing
|
Financial
Ratio
|
Description
|
2019
|
2018
|
Different
|
|
Gross
Profit Margin
|
0.38
|
0.35
|
+0.03
|
|
Net
Profit Margin
|
0.14
|
0.16
|
-0.02
|
|
Interest
Coverage Ratio
|
578.56
|
808.87
|
-230.31
|
|
Effective
Tax
|
0.25
|
0.25
|
0.00
|
Warrant
No Warrant issue
Dividend
and Bonus Issued for the past five year
HAIO had constant
dividend for the past five year from 2014 – 2018 with the average of RM 0.14
with the dividend yield of 5.56 % base on HAIO stock price of RM 2.52 on 21/9/2019.
|
PROS:
|
|
è HAIO had dividend yield of 5.56 %
for the past five year which is higher than fixed deposit of 3.00%
|
|
|
Market
Research
Affin Hwang Capital (26
June 2019)
Price Target : RM 1.80
- Incentive trip campaign failed to revitalise MLM sales
JX APEX Security Bhd (26
June 2019)
Price Target : RM 2.24
- MLM division - business environment remain challenging
- Wholesale division – focus on core products
- Retail division – continuous expansion
KENAGA Investment BankBerhad (26 June 2019)
Price Target : RM 1.95
- Pressure from stagnant distributors’ growth
- Weakening of MYR against RMB
Estimated
Price
IVKLS Price : RM 1.53