Is It Time To Consider Buying Hai-O Enterprise Berhad (KLSE:HAIO)?

While Hai-O Enterprise Berhad (KLSE:HAIO) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the KLSE, rising to highs of RM2.37 and falling to the lows of RM2.07. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Hai-O Enterprise Berhad's current trading price of RM2.13 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Hai-O Enterprise Berhad’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Hai-O Enterprise Berhad

Is Hai-O Enterprise Berhad still cheap?

Great news for investors – Hai-O Enterprise Berhad is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Hai-O Enterprise Berhad’s ratio of 16.21x is below its peer average of 26.44x, which indicates the stock is trading at a lower price compared to the Online Retail industry. Another thing to keep in mind is that Hai-O Enterprise Berhad’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

Can we expect growth from Hai-O Enterprise Berhad?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 9.8% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Hai-O Enterprise Berhad, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since HAIO is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on HAIO for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy HAIO. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

If you want to dive deeper into Hai-O Enterprise Berhad, you'd also look into what risks it is currently facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Hai-O Enterprise Berhad.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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