KLCI Stock - MPHB / 3859 - 2009 Quarter 4

MULTI-PURPOSE HOLDINGS BERHAD

Listing Date: 11.01.1982
Market: MAIN
Sector: TRADING/SERVICES
Par Value: 1.00
Major Industry: Recreation
Sub Industry : Miscellaneous Recreation

MULTI-PURPOSE HOLDINGS BERHAD is engaged in the core businesses of financial services, stock broking and gaming. The principal activities consist of investment holding and trading, operation of general insurance business, provision of leasing, hire purchase, factoring and general loan financing services, operation and management of a licensed four digit numbers forecast betting game, operation of hotels and of a golf club, securities broking and dealing, designing and construction of railway and related activities, property development, provision of share registration and management services, printing activities, and provision of computer software and other related services. In March 2008, it incorporated a wholly owned offshore subsidiary, Multi Purpose International Limited. In June 2008, the Company acquired Caribbean Gateway Sdn Bhd.

My Target Price: 3.37+0.05=3.42 (PE 10, EPS 0.3367, DPS 0.05)
My decison: BUY
Reason: Undervalue, overall Divisions improvement especially 4D Jackpot game

My study based on 2009 Quarter 4 report (number in '000):-
- The Group recorded 134.84% higher than previous corresponding period profit before taxation due to overall improvement in the Stockbroking and Financial Service Divisions as well as gains from disposal of investment in quoted shares
- The launch of the 4D Jackpot game by the Gaming Division has had a favourable impact on the revenue. However higher 4D Jackpot prizes payout and initial 4D Jackpot expenses had reduced the profit before taxation from continuing operations as compared to previous corresponding quarter
- Higher brokerage income and write back of provision for diminution in value of investments in the Stockbroking Division has resulted an improvement from loss to profit in the previous corresponding period
- The Financial Service Division reported a profit as compared to loss in the previous corresponding period due to increase in the premium earned coupled with lower claim incurred have contributed to the significant increase
- Estimate next 4Q eps after 2009 Q4 result announced = 0.3367 (5% grow from 0.3207, due to 4D Jackpot game and current economic environment), estimate PE on current price 2.34 = 6.8(DPS 0.05)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.28, estimate highest/lowest PE = 6.79/6.04 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.32, estimate highest/lowest PE = 6.56/5.44 (DPS 0.06)

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