Affin Upgrades Hai-O Enterprise To Reduce From Sell

29 Dec 2011

Affin Investment upgrades Hai-O Enterprise (7668.KU) to Reduce from Sell and raises the price target to MYR1.80 from MYR1.27 after revising up its FY12-FY14 net earnings forecasts by 2%-6%.  The house says with new membership additions in the company's multi-level marketing division holding steady at 2,000/month, "it's clear the worst is over for Hai-O."  IT, however, adds that it doesn't expect revenue contribution from the MLM division to return to its earlier highs of over MYR100 million/quarter. "Management also guided that MLM operations in Indonesia remains sluggish.  Thus, we believe earnings going forward will be supported by sturdy domestic sales and steady margins." The stock is down 2.1% at MYR1.90.