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Sunday, December 26, 2010

KLCI Stock - TGOFFS / 7228 - 2010 Quarter 3

Company Info
Market Capital (Capital Size)472,658,716 (Small)
Par ValueRM 0.50

My Analysis
Forecast P/E now(1.62-0.01)/0.077 = 20.91 (High)
Target Price1.08+0.01 = 1.09 (PE 14.0, EPS 0.077, DPS 0.01)
DecisionNOT BUY unless price below 1
Revenue second consecutive slowly increasing but still lower than preceding year corresponding quarter, profit second consecutive decreasing but recovered from loss in preceding year corresponding quarter, Free cash flow and net cash flow also increasing, cash increasing, liquidity ratio increased but still at low level, gearing ratio decreasing but still at high level, receivables and payables period increasing, oil and gas price increasing
First Support Price1.34
Second Support Price1.2
Risk RatingHIGH

Research House
OSK Target Price1.6 (2010-11-25)

Accounting Ratio
Return on Equity2.66%
Dividend Yield-
Profit Margin0.91%
Tax Rate19.54%
Asset Turnover0.485
Net Asset Value Per Share1.31
Net Tangible Asset per share1.28
Price/Net Tangible Asset Per Share1.16
Cash Per Share0.26
Liquidity Current Ratio1.4754
Liquidity Quick Ratio1.4344
Liquidity Cash Ratio0.346
Gearing Debt to Equity Ratio2.0116
Gearing Debt to Asset Ratio0.6645
Working capital per thousand Ringgit sale19.6%
Days to sell the inventory7
Days to collect the receivables163
Days to pay the payables118

My notes based on 2010 quarter 3 report (number in '000):-
- For the current quarter ended 30 September 2010, the Group recorded a decrease of 11.38% in consolidated revenue as compared to the corresponding quarter ended 30 September 2009. The net profit after tax recorded for the current quarter ended 30 September 2010 of RM1.0 million is 100% higher than a net loss of RM10.28 million recorded in the corresponding quarter ended 30 September 2009

- During the quarter under review, the Group recorded lower revenue as compared to the preceding year quarter due to the completion of engineering equipment contracts in the first half of 2010. Further thereto, MV Tanjung Gelang and MV Tanjung Pinang 3 have completed the respective long term charters. The management of Tanjung is in the midst of procuring new long term charters for the aforesaid vessels in the near term

- The Group’s total revenue for the current quarter of RM137.25 million is similar to the revenue levels recorded in the preceding quarter ended 30 June 2010 of RM137.15 million. The Group’s consolidated net profits registered in the current quarter represents a decrease of 72% as compared to the net profits registered in the preceding quarter ended 30 June 2010. The reduction in the net profit in the current quarter is due to the reduction in the profit from associate company, Hercules Tanjung Asia Sdn Bhd

- EPS improvement from FYQ32009 of 0.0094 to FYQ32010 of 0.0254 is 170.2%

- Estimate next 4Q eps after 2010 Q3 result announced = 0.035*1.1*2 = 0.077(use 100% improvement forecast), estimate PE on current price 1.62 = 20.91(DPS 0.01)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0124*4*1.1*2 = 0.1091, estimate highest/lowest PE = 17.78/13.84 (DPS 0.01)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0119*4*1.1*2 = 0.1048, estimate highest/lowest PE = 19.18/10.11 (DPS 0.01)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0096*4*2 = 0.0768, estimate highest/lowest PE = 16.01/9.4 (DPS 0.01)

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