KLCI Stock - HAIO / 7668 - 2010 Quarter 3

OSK TP: 5.04
My TP: 4.47+0.18=4.65 (PE 12, EPS 0.3729, DPS 0.18)
My decison: NOT BUY (unless price <=4.2)
Reason: Overvalue

 My study based on 2010 Q3 report (number in '000):
 - Comapre to last year, higher revenue and higher profit mainly contributed by its principal subsidiary, the MLM division and higher Group’s rental income received
- Compare to preceding quarter, registered marginal lower revenue due to the MLM division had just completed its sales campaign in the second quarter whereas for the retail division, the pre-stock take sales promotion campaign was usually carried out half yearly. Lower profit due to the reasons as mentioned above coupled with higher personnel expenses and higher A&P costs incurred. Moreover realisation of exchange fluctuation reserve on disposal of foreign associates, amounting to RM 0.6 million was booked in the second quarter
- Estimate next 4Q eps after 2010 Q3 result announced = 0.3729, estimate PE on current price 4.68 = 12.07(DPS 0.18)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.2424*4 = 0.9696, estimate highest/lowest PE = 10.78/7.44(DPS 0.42)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.2217*4 = 0.8868, estimate highest/lowest PE = 8.54/6.33 (DPS 0.42)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.1778*4 = 0.7112, estimate highest/lowest PE = 7.44/5.76 (DPS 0.4)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1463*4 = 0.5852, estimate highest/lowest PE = 6.9/5.06 (DPS 0.4)