Sell HAIO?

Today HAIO stock price dropped significantly again. I bought in at RM3.5 2 days ago and today it was at ~RM3.3 translate to 6% lost for me. And my entire HAIO portfolio gain drop significantly as well. It wrote off about 55% of my gain. Should i still hold this position? is my Buy Hold strategy broken? One of my broker told me that investor were speculating some accounting fraud in HAIO after share split. I think if this true, it is very serious. Any way to detect accounting fraud? I think with my current CFA knowledge, i am still not able to detect this... share with me if you know anything about this.


 

HAIO surges after earning report? Fundamental, technical or hybrid analysis for HAIO? RHB, Affin or OSK for HAIO? Buy Hold for HAIO?

Shares of HAI-O ENTERPRISE BHD surged in early trade on Wednesday, Dec 23 after it reported a strong set of earnings. It was up 42 sen to RM7.92 at 9.15am. There were 106,500 shares traded. However, the 30-stock FBM KLCI fell 1.84 points to 1,258.58. There were 28.73 million shares done valued at RM32.25 million. Hai-O reported net profit of RM20.18 million in its second quarter ended Oct 31, a jump of 85% from RM10.89 million a year ago, as more consumers bought its health and wellness products. The company said revenue rose 51% to RM132.37 million from RM87.29 million. Earnings per share were 24.23 sen compared with 13.38 sen. It declared dividend of 10 sen per share. It also proposed a bonus issue of up to 16.89 million new RM1 shares on the basis of one bonus share for every five existing shares held. It also proposed a share split involving the subdivision of each Hai-O share into two 50 sen shares.

Let me share some analysis report done by different Investment Bank.
RHB Research Institude Sdn Bhd.
Date: 12/23/2009
Share Price: RM7.5
Fair Value: RM9.9

Affin Investment Bank.
Date: 12/23/2009
Share Price: RM7.5
Target Price: RM11.06

OSK
Date: 12/23/2009
Share Price: RM7.5
Target Price: RM8.95

Technical Analysis:

Base on the report from 3 different expert, valuation result showed 3 different target price with RM8.95, RM9.9 and RM11.06. HAIO was traded between RM8.37 - RM8.83 on 12/31/2009. From the technical, it showed very bullish for HAIO. But is it too late to enter the market? Dear investor, are you able to make some wise choice?

Maxis IPO result

Dear investor,

Maxis IPO result is already out. You could call up your broker to check the result. or below is the url
http://www.mih.com.my/enquiry.php

Maxis relist on Main Market Nov 19 2009?

I read some interesting article on Maxis market view. I would like to share as a follow on dicussion on my previous Maxis IPO article. Again both views are in 180' reverse direction ;)

Why it is a buy

1. A must have large cap stock for fund managers
2. Industry learder since year 2000 and offers investors biggest exporsure to Malaysia's telecoms sector
3. It has a performance driven board and management (Ananda)
4. Good track record as old Maxis delivered 300% total return
5. Generate more cash vs spending due to hived off from overseas unit. Good dividens.

Why it is not a buy

1. RM5.2 is higher valuation than local and regional competitors. Limitted potential upside.
2. Not the only choice for dividend yeilds.
3. No regional exporsure, lack of growth
4. When the old Maxis debutted on Bursa in year 2002, mobile penetration was about 40% vs today more than 100% penetration.
5. Margin under stress due to competition.

how about you? is Maxis a buy or not for you?

Is Maxis IPO RM5.2 attractive enough?

Thank to anonymous for sharing below url in my previous article. It's very useful and provide some view on the Maxis IPO valuation to the investor.

http://online.wsj.com/article/SB125719127352623511.html
http://www.reuters.com/article/innovationNews/idUSTRE59B0P420091012
http://mysmartmoneytips.com/2009/11/02/should-you-subscribe-to-the-maxis-ipo/
http://www.google.com/hostednews/afp/article/ALeqM5hEev48YbArfdzW87fuguU11b3VBw

Valuation:
Is RM5.2 at the right price? some analysis said it is too high, some said it should be RM4-6, some said you should not pay more than RM7, some said RM6. Which one is correct? Let review some IPO details. Based on the IPO price of RM5.2 per offer share, the total market capitalisation is estimated at RM39 billion. (When Maxis was privatised at RM15.6 per share, the company's market cap stood at RM39 billion as well). According to merchant bankers, if Maxis is valued based on EV/EBITDA, a RM5.2 is too high and translate to >9. Telekom Malaysia ~ 4.99 EV/EBITDA, DIGI.Com ~ 7.25 EV/EBITDA, China Mobile ~ 4.96 EV/EBITDA.

But whatever valuation, i believe Ananda has a record of creation value for his shareholders. right? Let look at Maxis accomplishments over the year and some recent awards.
December 2004 - First operator in Malaysia to launch the BlackBerry
April 2005 - First operator in Malaysi to launch 3G services
September 2006 - First operator in Malaysia to launch HSPA for wireless broadband services
March 2008 - First operator in Malaysia to surpass 10 millions subscriptions
March 2009 - First operator in Malaysia to lanch the Apple iPhone
April 2009 - First operator in Malaysia to launch commercial NFC services
PC.com Awards 2009 - Best Mobile Broadband
Frost & Sullivan Malaysia Telecoms Awards 2009 - Mobile Data Service Provider of the year
Brand Finance Awards 2008 and 2009 - Number 4 brand in Malaysia
Asia Mobile News Awards 2008 - Mobile Operator of the Year Malaysia
Malaysian Effie Awards 2008 - Silver Award Winner.

Market Overview:
Subscribers ('000)  Dec2006     Dec2007     Dec2008     June2009
Maxis                     8,068          9,765          11,234         11,423
Celcom                   6,079          7,202            8,761           9,698
Digi                         5,312          6,409            7,062           7,230

Financial Data:
Revenue (Million)   Dec2006     Dec2007     Dec2008     June2009
Maxis                      6,957.1       7,689.6       8,449.8        4,243.8
Axiata                    16,339.2      9,996.9     11,347.7        6,030.4
Digi                          3,652.5       4,362.6       4,814,5        2,423.2

PAT (Million)         Dec2006     Dec2007     Dec2008      June2009
Maxis                       2,105.4       1,980.2        2,400.4        1,141.0
Axiata                       2,302.3       1,847.6           471.1           621.8
Digi                              805.7       1,062.6        1,140.7           509.9

base on some peer comparison, are you favour in Maxis? is Maxis IPO too expensive for you? Dear investor, you have a choice :)

Maxis IPO

Dear investor, are you ready for Maxis IPO? you could check out the customer eligibility to apply the offer shares at below url. IPO price is at RM5.2
https://dealernet.maxis.com.my/S/maxisipo/eligibility_check.asp

Growth Potential of Australia Market??

Public Mutual Bhd is launching a new fund, Public Australia Equity Fund (PAUEF) on 8 September 2009 to tap into the growth potential of the Australian Market. Its chief executive officer Yeoh Kim Hong said PAUEF would give investors the opportunity to capitalise on the long-term growth potential of the Australian market, given the country's strong position in natural resources and its diversified services sector.

The fund will mainly focus on sectors such as the natural resources, banking, real estate and consumer sectors. Please refer the url for more detail.

http://www.publicmutual.com.my/page.aspx?name=prs_rls_090907_1600

http://www.theedgemalaysia.com/business-news/148822-public-mutual-launches-new-fund-to-capitalise-on-australian-market.html

As usual, this new fund brought up some discussion among my friends at our kopitiam session ;)

Some said "well, it's potential"

Some said "i would rather invest in China Market"

Some said "how about the predicted performance?"

Some said "i am not interested in mutual fund. i am an equity guy."

Whatever category you are, let review some data. I have compiled some of market movment of Equity Indexes that included US (DJI), Australia (S&P/ASX200), Hong Kong (HSI), Singapore (STI) and Malaysia (KLSE). I hope this data could help you up ;)

DJI

-32.2% from it's peak

+46.7% since march 2009

S&P/ASX200

-32.7% from it's peak

+46.1% since march 2009

HSI

-33.1% from it's peak

+86.5% since march 2009

STI

-30% from it's peak

+84% since march 2009

KLSE

-20.3% from it's peak

+44.1% since march 2009

Despite of the rebound since march 2009, most of the equtiy market is still underperform. Which market is more attractive to you? Another risk factor to think about it when investing oversea - currency exchange. I have compiled some of the past currency exchange data for AUD, CNY, HKD, SGD and MYR. In long term, which of the following currency will appreciate?

AUD - potential to appreciate vs the peak

CNY - potential to appreciate

HKD

SGD - potential to appreciate vs the peak

MYR - potential to appreciate vs the peak