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Thursday, December 30, 2010

KLCI Stock - ANNJOO / 6556 - 2010 Quarter 3

Company Info 
Market Capital (Capital Size)1,515,853,716 (Large)
Par ValueRM 1.00

My Analysis 
Forecast P/E now(2.9-0.06)/0.16 = 17.75 (High)
Target Price1.44+0.06 = 1.50 (PE 9.0, EPS 0.16, DPS 0.06)
DecisionNOT BUY
Revenue largely decreased and lower than preceding year corresponding quarter, eps same with revenue, cash largely decreasing, liquidity ratio decreasing at low level now, gearing ratio increasing at high level now, over inventory
First Support Price2.75
Second Support Price2.55

Research House
OSK Target Price2.76 (2010-11-29)

Accounting Ratio 
Return on Equity16.01%
Dividend Yield2.07%
Profit Margin5.16%
Tax Rate21.90%
Asset Turnover0.6824
Net Asset Value Per Share1.3
Net Tangible Asset per share1.29
Price/Net Tangible Asset Per Share2.22
Cash Per Share0.06
Liquidity Current Ratio1.0501
Liquidity Quick Ratio0.1681
Liquidity Cash Ratio0.0316
Gearing Debt to Equity Ratio1.462
Gearing Debt to Asset Ratio0.5903
Working capital per thousand Ringgit sale4.1%
Days to sell the inventory291
Days to collect the receivables40
Days to pay the payables33

My notes based on 2010 quarter 3 report (number in '000):-
- During the quarter under review, the Group recorded 13% lower revenue as compared to the corresponding quarter of the preceding year. The decline in revenue in current quarter was mainly due to lower export tonnages on the back of lackluster international market conditions

- The Group achieved a 72% lower profit before tax (“PBT”) for the current quarter than the corresponding quarter of the preceding year. The erosion of the Group’s profitability was mainly due to higher cost of sales arising from higher raw materials costs despite continuous improvement in operational efficiency during the period under review

- The Group recorded revenue for the current quarter was 44% lower than the preceding quarter. Correspondently, the Group registered a 83% lower PBT for the current quarter than the preceding quarter. The decrease in revenue and PBT was mainly attributed to lower export tonnages amidst the escalated production costs arising from higher input costs

- Estimate next 4Q eps after 2010 Q3 result announced = 0.04*4 = 0.16, estimate PE on current price 2.9 = 17.75(DPS 0.06)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0517*4 = 0.2068(0.0517 is average eps of Q110,Q409,Q308, due to steel price decreasing), estimate highest/lowest PE = 15.91/11.9 (DPS 0.06)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0591*4 = 0.2364, estimate highest/lowest PE = 12.39/9.31 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.048*4 = 0.192, estimate highest/lowest PE = 15.68/13.54 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0682*4 = 0.2728, estimate highest/lowest PE = 12.17/8.69 (DPS 0.03)

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