KUALA LUMPUR (March 26): Shares in Hai-O Enterprise Bhd fell 1.9% after the multi-level marketing (MLM) company reported yesterday a drop in both net profit and revenue for the third quarter ended Jan 31, 2019.

As at 9.45am, the stock, which was thinly traded with 89,500 shares, fell five sen to RM2.65.

Yesterday, Hai-O announced that its third quarter net profit fell 25.9% to RM12.79 million or 4.4 sen per share, from RM17.27 million or 5.95 sen per share a year earlier, dragged by its MLM and wholesale divisions.

Revenue for the quarter ended Jan 31, 2019 fell 16.4% to RM86.16 million from RM103.07 million previously.

Hai-O attributed the decline in its MLM division's earnings to a drop in the number of new members recruited and lower sales of consumer products.

The group's earnings missed consensus expectations and in view of this, research analysts have revised their earnings estimates moving forward.

Affin Hwang Capital Research said it had lowered its target price on the stock after Hai-O missed earnings expectations by 68%.

"We maintain Hold on Hai-O with a lower target price of RM2.50, after revising our Earnings Per Share estimates lower as we turn less upbeat on its MLM segment's performance," Affin Hwang Capital said in a note today.