KLCI Stock - DIGI / 6947 - 2010 Quarter 2

Market Cap : 777500000*23.74 = 18,457,850,000 (Very Large)
NTA per share : (1386157-888918)/777500 = 0.64
P/BV : 23.74/0.64 = 37.09
Forecast P/E now : (23.74-1.99)/1.4579 = 14.92 (Moderate)
ROE : 69.5% (High)
DY : 1.99/23.74*100 = 8.38% (High)
Fixed Asset Turnover(3 year) : (1.048+1.036+0.9964)/3 = 1.0268 (High)
Liquidity Ratio : 1185537/2080971 = 0.5697 (Low)
Receivables Collection Period : (433758+480179)/2/(5111832/365) = 32 days (Good)
My Target Price : 23.33+1.99 = 25.32 (PE 16, EPS 1.4579, DPS 1.99)
My Decision : NOT BUY (unless price around 23)
My Comment : Revenue and profit increasing, good cash flow, high debt but decreased little, navps increased
Technical Support Price : 23, 22.6
Risk Rating : LOW

My notes based on 2010 Quarter 2 report (number in '000):-
- The Group registered strong revenue for the current financial period, up 8% from the same period last year. The growth was driven by increased usage coupled with a larger customer base of 8.1 million (2009: 7.2 million). Average revenue per user (“ARPU”) dipped from RM55 in the previous financial period to RM53; on the back of increasing price competition in the market
- Earnings before interest, tax, depreciation and amortisation (“EBITDA”), an 8% improvement from the preceding financial period; a direct result of the Group‟s ongoing operational efficiency initiatives, in addition to revenue growth as mentioned above. The EBITDA margin improved to 44.0% (2009: 43.9%), despite accounting for higher traffic and network operating costs, as well as handset bundles
- PBT in 2nd Quarter 2010 more or less equaled the preceding quarter‟s. Despite the 3% quarterly revenue growth, the EBITDA margin of 43.3% was reduced due to increased sales of handset bundles, as highlighted in the preceding quarter, partly off-set by lower allowances for credit losses from improved collections, and increased cost savings from operational efficiency initiatives
- Estimate next 4Q eps after 2010 Q2 result announced = 1.3254*1.1 = 1.4579(10% grow from 1.3254), estimate PE on current price 23.74 = 14.92(DPS 1.99)
- Estimate next 4Q eps after 2010 Q1 result announced = 1.3254(3% grow from 1.2868), estimate highest/lowest PE = 16.27/15.01 (DPS 2.13)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.317*4 = 1.268, estimate highest/lowest PE = 17.21/15.82 (DPS 1.78)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.3139*4 = 1.2556, estimate highest/lowest PE = 16.27/15.47 (DPS 1.77)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.3016*4 = 1.2064, estimate highest/lowest PE = 17.12/16.21 (DPS 1.75)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.3543*4 = 1.4172, estimate highest/lowest PE = 15.51/14.1 (DPS 1.62)

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