DIGI / 6947 - 2009 Q4

OSK TP: 23.1
My TP: 19.02 + 1.77 = 20.79 (PE 15, EPS 1.268, DPS 1.77)
My decison: NOT BUY
Reason: Overvalue

My study based on 2009 Q4 report (number in '000):
- ROE compare to last Q increased 3.06% to 16.2% and also higher than last year 1.32%
- Revenue compare to last Q growth 0.71% to 1247612 and profit also growth 0.98% to 246480, mainly due to higher net addition of new customers, lower allowance for doubtful debts and more efficient sales and marketing expenses; As compare to last year revenue growth 1.29% but profit dropped 12.67%, mainly due to reduced spending by low income segments affected by the economic slowdown during the year as well as competitive market conditions, increased

traffic and network operating costs, as well as mobile internet expansion costs and higher

allowance for doubtful debts contributed to the margin and increased amortisation charges related to the 3G spectrum and higher finance costs pertaining to additional borrowings taken up

- Equity compare to last Q decreased 18.12% to 1521468, assets decreased 2.62% to 4732444 but liabilities increased 6.97% to 3210976; As compare to last year equity decreased 19.8%, assets increased 1.65% and liabilities also increased 16.4%
- Got FCF 951594 and NCF 98908
- Profit margin compare to last Q increased 0.06% to 19.76% but lower than last year 3.16%
- DE compare to last Q increased 0.4949 to 2.1104 and compare to last year also increased 0.6563
- 54 sen dividend declared
- My estimate next 4Q eps after 2009 Q4 result announced = 0.317*4 = 1.268, estimate PE on current price 22.32 = 16.2(DPS 1.78)
- From date 2009-10-29 to 2010-02-03 after 2009 Q3 result announced, highest price on 2009-11-04 was 22.2 and lowest price on 2009-12-08 was 21.2. Estimate next 4Q eps = 0.3139*4 = 1.2556, estimate highest/lowest PE = 16.27/15.47 (DPS 1.77)
- From date 2009-07-23 to 2009-10-28 after 2009 Q2 result announced, highest price on 2009-10-15 was 22.4 and lowest price on 2009-09-28 was 21.3. Estimate next 4Q eps = 0.3016*4 = 1.2064, estimate highest/lowest PE = 17.12/16.21 (DPS 1.75)
- From date 2009-05-01 to 2009-07-22 after 2009 Q1 result announced, highest price on 2009-05-29 was 23.2 and lowest price on 2009-06-09 was 21.6. Estimate next 4Q eps = 0.3543*4 = 1.4172, estimate highest/lowest PE = 15.51/14.1 (DPS 1.62)
- Divident in sen 2009 = 1.77 (declared 54 sen on Q4, 75 sen on Q3 and 49 sen on Q2), 2008 = 1.88 (declared 53 sen on 2009 Q1, 78 sen on 2008 Q3 and 57 sen on 2008 Q2), 2007 = 2.2775 (declared 59.25 sen on 2008 Q1, RM 1 on 2007 Q3 and 68.5 sen on 2007 Q2)