OSK Research TP: 7.9 (26 Nov 09)
My TP: 6.39+0.07(DPS) = 6.46 (PE 16, EPS 0.3996)
My decision: NOT BUY
My opinion based on 2009 Q3 report (number in '000):
- Revenue was increasing, Leisure & Hospitality Division(Resorts
World Genting and the GENS Group’s UK casino) and the Power Division recorded higher revenue whilst the other business divisions recorded lower revenue.
- Resorts World Genting revenue increased mainly due to higher volume of business. The UK casinos however recorded lower revenue due to lower business volume. The decrease was further exacerbated by the weakening of the Sterling Pound against the Ringgit Malaysia.
- Increase in pre-opening expenses incurred for Resorts World Sentosa.
- Higher revenue from the Power Division arose mainly from the Meizhou Wan power plant due to higher generation of electricity and lower coal prices.
- Revenue from the Plantation Division declined mainly due to lower palm products prices and a lower FFB production.
- The softer property market conditions during the current quarter caused a decline in the revenue from the Property Division.
- The lower revenue from the Oil & Gas Division reflected mainly lower average oil prices.
- DE 0.676 consider good
- Minority interest in positive growing
- No FCF, cash mainly from borrowing, deposit also increased
- ROE quite low
- Profit margin at 15%, still low
- My estimate next 4Q eps after 2009 Q3 result announced = 0.0999*4 = 0.3996, estimate PE on current price 7.15 = 17.89
- From date 2009-08-27 to 2009-11-25 after 2009 Q2 result announced, highest price on 2009-10-23 was 7.74 and lowest price on 2009-09-02 was 6.45. Estimate next 4Q eps = 0.0577*4 = 0.2308, estimate highest/lowest PE = 33.54/27.95
- From date 2009-05-29 to 2009-08-26 after 2009 Q1 result announced, highest price on 2009-07-28 was 6.7 and lowest price on 2009-06-18 was 5.35. Estimate next 4Q eps = 0.0574*4 = 0.2296, estimate highest/lowest PE = 29.18/23.3
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