The document compares the financial performance of three direct selling companies - HAIO, Amway, and Zhulian. It analyzes metrics like return on invested capital, cash return on invested capital, gross margin, execution ability, debt-to-EBITDA ratio, and cash conversion cycle from 2010-2015. The analysis shows that Amway has consistently been the best performer, while HAIO has outperformed Zhulian in recent years, though Zhulian's cash conversion cycle is quite high due to elevated inventory levels.

1. HAIO VS. AMWAY VS.
ZHULIAN
7 December 2015
L. C. Chong

2. DISCLAIMER
I am NOT an investment advisor nor a financial advisor, and no information provided
here is to be interpreted as a suggestion to buy or sell securities.
Stock analysis in this presentation may not neutral because I have incorporated my
risk appetite and principles in the analysis.
All figures in MYR and in '000s, except per share data
2

3. DECLARATION OF INTEREST
• At the time of writing, I owned shares of HAIO.

4. KEEP IN TOUCH
http://lcchong.wordpress.com
https://goo.gl/jjkq4P

5. SCOPE
• Figures and ratios are based on the figures reported in Annual Report or the latest
Q4 Quarterly Report (QR)
• Comparisons are made merely based on financial figures
• Growth drivers and risks/challenges are not covered here
• Valuation is not covered in this analysis.

6. CHANGES
• 7 Dec 2015 – First write up in PowerPoint format

7. PEER COMPARISON (CONT.)
104.1%
126.6%
142.0% 140.9%
22.3% 22.3% 18.7%
6.4%
18.7% 20.0%
25.0%
19.5%
12.7%
0.0%
50.0%
100.0%
150.0%
2011 2012 2013 2014 2015
ROIC
AMWAY ZHULIAN HAIO

8. PEER COMPARISON (CONT.)
104.2% 106.4%
142.0%
124.5%
21.6%
14.8% 18.8%
3.3%4.1%
23.9%
17.6%
10.5% 11.0%
0.0%
50.0%
100.0%
150.0%
2011 2012 2013 2014 2015
CROIC
AMWAY ZHULIAN HAIO

9. PEER COMPARISON (CONT.)
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2010 2011 2012 2013 2014 2015
Gross Margin
AMWAY ZHULIAN HAIO

10. PEER COMPARISON (CONT.)
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
2010 2011 2012 2013 2014 2015
Execution Ability
AMWAY ZHULIAN HAIO

11. PEER COMPARISON (CONT.)
0.00 x
0.10 x
0.20 x
0.30 x
0.40 x
2010 2011 2012 2013 2014 2015
Debt / EBITDA
AMWAY ZHULIAN HAIO

12. PEER COMPARISON (CONT.)
0
100
200
300
400
500
600
2010 2011 2012 2013 2014 2015
Cash Conversion Cycle
AMWAY ZHULIAN HAIO

13. PEER COMPARISON (CONT.)
• Obviously, AMWAY performance is the best among three companies
• HAIO performance is better than ZHULIAN in recent years
• Cash Conversion Cycle of ZHULIAN is quite alerting because of extremely high level
of inventory.