HAI-O ... July 09

HAI-O ENTERPRISE is maintaining its Dividend Payout policy of at least 50% of its Net Profit for FYE Apr 30, 2009 (FY09) due to strong growth in revenue.

Group MD - TAN KAI HEE said the Group would keep its promise to shareholders on dividend policy despite the challenging economic environment. " .... To maintain our dividend payout policy is not easy at times like these. However, the current economic crisis has presented a unique opportunity for us, as more people, especially those without employment or wanting to have side income are turning to multi-level marketing (MLM), which in turn, gives us strong revenue ...." he said to THE EDGE FINANCIAL DAILY in an interview reported on Jun 22, 2009.

CASH POSITION OF RM50M
The Group has a cash position of approximately RM50m giving it an opportunity to look out for new business ventures. " .... Given that the entry cost for new ventures is now lower, it is a good opportunity to start looking around ...." he said, adding that HAI-O preferred to look at new ventures related to its core businesses.

INDON BUSINESS
HAI-O is starting its multi-level marketing businesses in Indonesia in Jul 2009, via its Jakarta-based 60%-owned - PT HAI-O. ".... We are targeting 5,000 new members for the first year of operations, which is a conservative number, based on the huge population of Jakarta ...." HEW said, adding that the main products targeted at the Indonesian market would be its water filter system and lingerie.

TAN said that given the majority of HAI-O's local distributors were Malays, with some having connections in Indonesia, the market would be easier to penetrate. " .... Indonesia is a good starting point for us. If we are successful there, then we will start looking at establishing our presence in other countries regionally ...." he said.

MULLING CHINA
TAN said China would be the next market after Indonesia that HAI-O was eyeing, possibly within the next two to three years. " .... We already have good businesses in Malaysia, but we know that we cannot contain our businesses locally only. We can say that we are now ready to prepare ourselves for regional expansion ...." he said.

TAN said HAI-O might begin its expansion plans to China with retail outlets in certain parts of the country, but its products would be marketed via single-level marketing, as multi-level marketing activities were not allowed in the country.

He added that, nevertheless, opening retail outlets would enable HAI-O to market more Malaysian-made products into China. " .... We have the advantage of networks with Chinese businessmen and companies, and there is great potential collaborating with some of them .... But, we want to be sure of gaining a foothold there first before we decide to venture into China fully. It will be a slow but steady process ...." TAN said, adding that the Group would still focus on its local businesses first.

RETAIL OUTLETS
HEW said HAI-O would spend between RM2m and RM3m in 2009 to open up to five retail outlets in Malaysia.