KUALA LUMPUR: Kenanga Research maintained outperform on Hai-O Enterprise with an unchanged target price of RM6 as 9M18 net profit of RM58.6mil came in within both its and consensus expectations at 70% of full-year forecasts.
9M18 net profit surged 42% underpinned by higher revenue drive by the MLM division and wholesale division attributable to higher sales volume from newly launched bick-ticket items in its MLM fashion and beauty care range of products and higher wholesale sales from its health tonic and Chinese tea.
"We expect 4Q18 to register higher sales with the start of the 26th year grand sales overseas trip promotion to Switzerland and Paris (Jan-May 2018) as well as maiden contribution from the highly anticipated shoes and leather goods designed with the consultation of Datuk Jimmy Choo," it said in its Monday research report.
The research firm said that moving forward, the MLM division will continue to expand its lifestyle segment of which margins are better compared to F&B products. On the other hand, wholesale and retail segments are expected to maintain its high EBIT margin with the sales of high margin in-house brands.
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