KLCI Stock - DAYANG / 5141 - 2010 Quarter 2

Par Value: 0.50
Market Cap : 352000000*2.04 = 718,080,000 (Medium)
NTA per share : 351177/352000 = 1
P/BV : 2.04/1 = 2.04
Forecast P/E now : (2.04-0.05)/0.1363 = 14.6 (High)
ROE : 12.7% (Moderate)
DY : 0.05/2.04*100 = 2.45 (Low)
Fixed Asset Turnover(2 year) : (0.5359+0.6193)/2 = 0.5776 (Low)
Liquidity Ratio : 181039/55342 = 3.2713 (Strong)
Receivables Collection Period : (85528+83964)/2/(188197/365) = 164 days
My Target Price : Not interested unless revenue and profit increase more
My Decision : NOT BUY
My Comment : Revenue and profit increasing, good cash flow, below moderate debt and slightly increased, navps increasing, order book increasing, O&G sector recovering
Technical Support Price : 1.7
Risk Rating : MODERATE

My notes based on 2010 quarter 2 report (number in '000):-

- The Group's revenue for the current quarter ended 30 June 2010 decreased by 11% while profit before tax and total comprehensive income for the current quarter decreased by 14% and 11% respectively. The lower revenue in the current quarter as compared to the corresponding quarter is mainly due to lower value of work orders received and performed in the current quarter

- Whilst revenue decreased by 11%, profit before tax (excluding share of results of an associate) for the current quarter decreased by 13% in view of the fact that the work orders in the current quarter have a lower profit margin contribution

- The Group’s associate, Syarikat Borcos Shipping Sdn Bhd, contributed a loss of approximately RM0.3 million, further reducing the group’s total profit before tax for the current quarter by 1.5%

- The Group’s revenue was 31% higher, the profit before tax 31% higher and the total comprehensive income 11% higher compared to the preceding quarter

- The higher revenue of RM56.5 million for the current quarter as compared to RM43.0 million for the preceding quarter is mainly due to higher work orders received and performed in the current quarter

- Whilst revenue increased by 31%, profit before tax increased by 31% in view of the fact that the work orders in the current quarter have a similar profit margin contribution as those of
the preceding quarter

- The Group’s associate, Syarikat Borcos Shipping Sdn Bhd contributed a loss of approximately reduction of 113% from the preceding quarter. The loss is due to lower vessel utilisation rate, softening of vessel charter rate by almost 30% and unfavourable USD/RM exchange rate of 10%

- Estimate next 4Q eps after 2010 Q2 result announced = 0.1239*1.1 = 0.1363 (0.1239 is recent 4Q cum_eps), estimate PE on current price 2.04 = 14.6(DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.129/4(average eps from recent 4Q)*0.9 = 0.1161 (10% drop year-to-year), estimate highest/lowest PE = 16.67/12.79 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.1237*0.9 = 0.1113(10% drop year-to-year), estimate highest/lowest PE = 19.14/14.82 (DPS 0.05, correction to last Q estimated)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1246, estimate highest/lowest PE = 16.21/9.71 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.1548, estimate highest/lowest PE = 8.98/6.91 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.1338, estimate highest/lowest PE = 8.67/3.73 (DPS 0.14)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.15, estimate highest/lowest PE = 7.87/ (DPS 0.14)

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