AMWAY / 6351 - 2009 Q4

OSK TP: 8.95 (01 March 2010)
My TP: 6.77+0.48=7.25 (PE 17, EPS 0.3984, DPS 0.48)
My decison: NOT BUY (unless price <=7.2) Reason: Overvalue, Many lower result however dividend >6%

My study based on 2009 Q4 report (number in '000):
- Sales revenue recorded an increase of 2.9% for the year ended 31 December 2009 as compared to the preceding year mainly due to successful sales and marketing programs
- Pre-tax profit decreased by 26.3% for the quarter under review as compared to same period last year, mainly due to unfavourable foreign exchange rate of Ringgit against US Dollar and higher advertising and promotional expenses incurred, lower interest rate income, and investment in consumer access driven strategies
- Revenue decreased marginally by 1.7% as compared to the preceding quarter
- Pre-tax profit decreased by 21.2% mainly due to higher advertising and product promotional expenses in line with the Group’s initiatives to promote brand awareness in conjunction with the opening of the new headquarters
- My estimate next 4Q eps after 2009 Q4 result announced = 0.0996*4 = 0.3984, estimate PE on current price 7.3 = 17.12(DPS 0.48)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1246*4 = 0.4984, estimate highest/lowest PE = 13.98/13.46 (DPS 0.48)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.099*4 = 0.396, estimate highest/lowest PE = 17.6/16.92 (DPS 0.5)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.118*4 = 0.472, estimate highest/lowest PE = 14.79/13.73 (DPS 0.52)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.1332*4 = 0.5328, estimate highest/lowest PE = 13.06/11.75 (DPS 0.54)