KLCI Stock - PHARMA / 7081 - 2010 Quarter 3

Company Info

Market Capital (Capital Size)	586,238,278 (Medium)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(5.48-0.27)/0.4068 = 12.81 (High)
Target Price	4.07+0.27 = 4.34 (PE 10.0, EPS 0.4068, DPS 0.27)
Decision	NOT BUY less price below 4.3 (due to high PE)
Comment	Revenue and profit decreased but still higher than preceding year, bad cash flow, low cash, lower profit margin, slightly better liquidity ratio but still at low level, better gearing ratio but still at above moderate level, inventory, receivables and payables ratio are acceptable, health index still high
First Support Price	5.4
Second Support Price	5.0
Risk Rating	HIGH

Accounting Ratio

Return on Equity	12.31%
Dividend Yield	8.58%
Profit Margin	4.25%
Tax Rate	40.62%
Asset Turnover	1.6228
Net Asset Value Per Share	3.97
Net Tangible Asset per share	3.7
Price/Net Tangible Asset Per Share	1.46
Cash Per Share	0.27
Liquidity Current Ratio	1.3418
Liquidity Quick Ratio	0.7184
Liquidity Cash Ratio	0.0783
Gearing Debt to Equity Ratio	0.8897
Gearing Debt to Asset Ratio	0.462
Working capital per thousand Ringgit sale	9.6%
Days to sell the inventory	68
Days to collect the receivables	63
Days to pay the payables	93

My notes based on 2010 quarter 3 report (number in '000):-
- In the current quarter under review, the Group's revenue was 1.3% higher from the same quarter last year, mainly due to higher sales to government sector

- The Group‟s profit before tax also increased by 63.8% from the same quarter last year. This was mainly due to higher gross profit margin as a result of the improvement in the production throughput during the current quarter

- The Group‟s revenue for the current quarter decreased by 4.6% from the immediate preceding quarter to the current quarter. The contraction in Group's revenue was mainly attributable to lower sales to government sector

- In line with the lower revenue in the current quarter, the Group's profit before tax registered a decrease of 24.1% from the immediate preceding quarter to current quarter. The decrease was further contributed by lower gross profit from private sector

- Estimate next 4Q eps after 2010 Q3 result announced = 0.1017*4 = 0.4068, estimate PE on current price 5.48 = 12.81(DPS 0.27)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1124*4 = 0.4496, estimate highest/lowest PE = 11.99/11.41 (DPS 0.27)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.5139*0.9 = 0.4625, estimate highest/lowest PE = 11.55/10.34 (DPS 0.27)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.5626, estimate highest/lowest PE = 8.85/6.99 (DPS 0.37)

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