BJTOTO / 1562 - 2010 Q2

Maybank Research TP: 4.05 (03 Dec 09)
OSK Research TP: 4.9 (11 Dec 09)
My TP: 4.88+0.29(DPS) = 5.17 (PE 16, eps 0.3048)
My stock cost: 4.14
My decision: HOLD
Reason: Undervalue, good cash flow and high dividend

My opinion based on 2010 Q2 report (number in '000):
- ROE still high at 32.46% but drop from 46.47%, average 20-30%
- Revenue drop 8.99% compare to last year
- Equity increased 46.13%, assets increased 6.61% and liabilities decreased 2.81%
- DE drop from 4.1973 to 2.7916, but this rate still consider high, average ~1.8.
- Long term borrowing decreased 15.1% but short term borrowing increased 9.63%
- Deposit increased 18.05% and receivables increased 91.9%
- Free cash flow decreased if compare to last year, mainly due to cash flow from operating decreased
- Minority interest (MI) increased ~10% to 10624 after reducing > 60% to 9784 since highest MI on 2008 Q4
- Total treasury shares as at 31 July 2009 reduce to 5332
- No dividend proposed
- My estimate next 4Q eps after 2010 Q2 result announced = 0.0762*4 = 0.3048, estimate PE on current price 4.34 = 13.29(DPS 0.29)
- From date 2009-09-10 to 2009-12-10 after 2010 Q1 result announced, highest price on 2009-09-25 was 4.48 and lowest price on 2009-11-30 was 4.14. Estimate next 4Q eps = 0.0797*4 = 0.3188, estimate highest/lowest PE = 13.14/12.08 (DPS 0.29)
- From date 2009-06-16 to 2009-09-09 after 2009 Q4 result announced, highest price on 2009-06-16 was 5.25 and lowest price on 2009-07-15 was 4.24. Estimate next 4Q eps = 0.0854*4 = 0.3416, but this is too high, so use last 3 years average eps = (0.3268+0.276+0.2905)/3 = 0.2978, estimate highest/lowest PE = 16.66/13.26 (DPS 0.29)
- From date 2009-03-17 to 2009-06-15 after 2009 Q3 result announced, highest price on 2009-06-11 was 5 and lowest price on 2009-03-31 was 4.58. Estimate next 4Q eps = 0.0773*4 = 0.3092, estimate highest/lowest PE = 15.33/13.97 (DPS 0.26)
- Divident in sen 2010 = 0.19 (proposed 19 sen on Q1), 2009 = 0.29 (proposed 11 sen on Q4, 5 sen on Q3, 7 sen on Q2 and 6 sen on Q1), 2008 = 0.35 (proposed 9 sen on Q4 8 sen on Q3, 8 sen on Q2 and 10 sen on Q1), 2007 = 0.45 (proposed 7.5 sen on Q4, 12.5 sen on Q3, 12.5 sen on Q2 and 12.5 sen on Q1)