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Saturday, March 6, 2010

BSTEAD / 2771 - 2009 Q4

NTA per share : 3.09

My TP: 6.48+0.275=6.76 (PE 10, EPS 0.648, DPS 0.275)
My decison: BUY
Reason: Undervalue, high dividend, revenue growth

My study based on 2009 Q4 report (number in '000):
- The Division achieved an average palm oil price of RM2,170 per MT, as against last year corresponding period's average of RM2,794 per MT. FFB crop totalling 1,106,371 MT was 5% lower than last year. The Heavy Industries Division due to slower progress of work and cost escalation. The hotel operation profit during the period under review was lower due to the start up cost of the recently opened Royale Chulan Hotel which the Group manages. The property development segment profit for the current period was also lower, due to lower corporate land sales. BH Insurance contributed a significantly higher pre-tax profit mainly due to the increase in underwriting and investment income and the reversal of provision for diminution of quoted investments. The Affin Group posted a pre-tax profit of RM497.2 million, a 23% increase over last year as the group’s core operating units were performing well. The group enjoyed increases in net interest and Islamic banking income which helped to offset against some increase in loan loss provision. The Trading Division's pre-tax profit of RM47.3 million was a significant turnaround from last year's loss of RM12.5 million, mainly due to the stronger performance from BHPetrol which had enjoyed a healthy operating surplus and stockholding gains. The Manufacturing Division's pre-tax profit of RM32.1 million was 64% higher, attributable mainly to the better contribution from UAC
- The Plantation Division's profit higher than the preceding quarter attributable largely to the lower estate expenditure. FFB crop fell 1.6% while CPO price averaged RM2,166 (Previous quarter: RM2,296) per MT. The Heavy Industries Division’s profit for the current quarter was 65% of the preceding quarter. The Property Division’s profit for the current quarter was 165% better mainly due to the fair value gains on investment properties. The Finance & Investment Division’s profit of RM65.3 million was 230% higher than last quarter’s profit of RM19.8 million, mainly due to the stronger contribution from BH Insurance while the recent rights issue also enabled the parent company to enjoy some interest savings. The Trading Division’s profit improved by 80% mainly due to the better sales volume and higher stockholding gains from BHPetrol.
- My estimate next 4Q eps after 2009 Q4 result announced = 0.162*4 = 0.648, estimate PE on current price 3.54 = 5.04 (DPS 0.275)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1241*4 = 0.4964, estimate highest/lowest PE = 6.89/6.06 (DPS 0.25)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0721*4 = 0.2884, estimate highest/lowest PE = 12.17/10.92 (DPS 0.2)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0934*4 = 0.3736, estimate highest/lowest PE = 11.78/8.94 (DPS 0.2)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.1699*4 = 0.6796, estimate highest/lowest PE = 5.15/3.97 (DPS 0.3)

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