KLCI Stock - PROTON / 5304 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	2,471,458,509 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(4.5-0.2)/0.4608 = 9.33 (Moderate)
Target Price	4.61+0.2 = 4.81 (PE 10.0, EPS 0.4608, DPS 0.2)
Decision	NOT BUY unless price below 4.3
Comment	Revenue decreased but higher than preceding year corresponding quarter, eps decreased and lower than preceding year corresponding quarter, neither got free nor positive net cash flow, low liquidity ratio, below moderate gearing ratio, all accounting period are good
First Support Price	4.45
Second Support Price	4.15
Risk Rating	MODERATE

Research House

UOB Target Price	5.2 (2010-11-19)
Affin Target Price	4.6 (2010-11-26)
MIDF Target Price	5.2 (2010-11-26)
OSK Target Price	6.18 (2010-11-26)
RHB Target Price	5.6 (2010-11-26)
HwangDBS Target Price	4.7 (2011-01-10)
CIMB Target Price	5.95 (2011-01-21)
AMMB Target Price	6.1 (2011-01-24)
Maybank Target Price	5.9 (2011-01-24)

Accounting Ratio

Return on Equity	4.89%
Dividend Yield	4.44%
Profit Margin	3.63%
Tax Rate	18.88%
Asset Turnover	1.1753
Net Asset Value Per Share	9.83
Net Tangible Asset per share	8.32
Price/Net Tangible Asset Per Share	0.57
Cash Per Share	2.4
Liquidity Current Ratio	1.9149
Liquidity Quick Ratio	1.1894
Liquidity Cash Ratio	0.6739
Gearing Debt to Equity Ratio	0.3884
Gearing Debt to Asset Ratio	0.2797
Working capital per thousand Ringgit sale	20.3%
Days to sell the inventory	59
Days to collect the receivables	40
Days to pay the payables	63

My notes based on 2011 quarter 2 report (number in '000):-
- Improvement in sentiments continued to generate demand for PROTON vehicles. In line with the improved market conditions, domestic sales for the 3-core models grew by 13% compared to the corresponding period last year

- Correspondingly, Group pbt for the six months ended 30 September 2010 of RM186 million compares favourably to the profit of RM165 million posted in the corresponding period last year. Higher domestic sales volume and improved profit margins largely contributed to the surge in profit

- Group pbt at RM81 million was lower than RM105 million recorded in the immediate preceding quarter. Despite a slight increase in domestic sales volume, the profit declined and this is largely attributable to the one-off provision for stock obsolescence and branding cost incurred by a principal subsidiary company

- Estimate next 4Q eps after 2011 Q2 result announced = 0.4608, estimate PE on current price 4.5 = 9.33(DPS 0.2)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.4902*0.95 = 0.4657, estimate highest/lowest PE = 10.37/9.28 (DPS 0.2)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.4353*1.05 = 0.4571(5% increase), estimate highest/lowest PE = 10.44/9.52
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1451*4 = 0.5804, estimate highest/lowest PE = 8.67/6.89
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1494*4 = 0.5976, estimate highest/lowest PE = 7.16/6.12 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0993*4 = 0.3972, estimate highest/lowest PE = 11.15/7.25 (DPS 0.05)

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