Company Info
My Analysis
Research House
Accounting Ratio
My notes based on 2010 quarter 4 report (number in '000):-
- Revenue for the quarter at RM91 million is a 22% improvement over corresponding quarter last financial year. Operating profit dipped 31% from the high raw material cost and weak US dollar. The fast hike in rubber prices induced a large time-lag related delay in revenue increase even though cost are eventually passed into selling price. This drag down the quarter’s earnings. A new factory was completed in this period, adding capacity to the tight high utilization rate in some products
- The quarter’s revenue increased 4% and earnings fell 50% over preceding quarter. The increase in price of rubber latex plus weakening of US Dollar contributed to the lower earnings. Since more than 80% of the Group’s sales are in US Dollar, currency fluctuations increased the time-lag effect in any price increase exercise that the Group implemented
- Estimate next 4Q eps after 2010 Q4 result announced = 0.04*4 = 0.16, estimate PE on current price 2.44 = 11.34(DPS 0.07)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.055*4*0.95 = 0.209, estimate highest/lowest PE = 12.39/8.71 (DPS 0.07)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0434*4 = 0.1736*1.1(QbQ improvement adjustment) = 0.191, estimate highest/lowest PE = 16.81/11.78 (DPS 0.07)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.063*4 = 0.252, estimate highest/lowest PE = 15.36/11.35 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0372*4 = 0.1488, estimate highest/lowest PE = 28.83/18.28 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0319*4 = 0.1276, estimate highest/lowest PE = 23.2/11.36 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0272*4 = 0.1088, estimate highest/lowest PE = 19.39/7.77 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0232*4 = 0.092, estimate highest/lowest PE = 13.04/8.26 (DPS 0.06)
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| Market Capital (Capital Size) | 386,547,998 (Small) |
| Par Value | RM 0.50 |
My Analysis
| Forecast P/E now | (2.53-0.07)/0.16 = 15.38 (High) |
| Target Price | 1.44+0.07 = 1.51 (PE 9.0, EPS 0.16, DPS 0.07) |
| Decision | NOT BUY unless USD currency strengthen and latex price decrease |
| Comment | Revenue is highest since FY09Q2, eps second consecutive quarter increasing and also higher than preceding year corresponding quarter, no free cash flow but got positive net cash flow, liquidity ratio decreasing to low level now, gearing ratio increasing to above moderate level now, working capital largely decreased, payables period increased |
| First Support Price | 2.3 |
| Second Support Price | 1.9 |
| Risk Rating | HIGH |
Research House
| OSK Target Price | 3.8 (2010-12-23) |
| RHB Target Price | 2.21 (2010-12-23) |
| CIMB Target Price | 3.14 (2010-12-29) |
Accounting Ratio
| Return on Equity | 16.01% |
| Dividend Yield | 2.77% |
| Profit Margin | 4.64% |
| Tax Rate | - |
| Asset Turnover | 0.8045 |
| Net Asset Value Per Share | 1.5 |
| Net Tangible Asset per share | 1.47 |
| Price/Net Tangible Asset Per Share | 1.31 |
| Cash Per Share | 0.28 |
| Liquidity Current Ratio | 1.1286 |
| Liquidity Quick Ratio | 0.7164 |
| Liquidity Cash Ratio | 0.2678 |
| Gearing Debt to Equity Ratio | 0.8723 |
| Gearing Debt to Asset Ratio | 0.4649 |
| Working capital per thousand Ringgit sale | 5.9% |
| Days to sell the inventory | 80 |
| Days to collect the receivables | 76 |
| Days to pay the payables | 74 |
My notes based on 2010 quarter 4 report (number in '000):-
- Revenue for the quarter at RM91 million is a 22% improvement over corresponding quarter last financial year. Operating profit dipped 31% from the high raw material cost and weak US dollar. The fast hike in rubber prices induced a large time-lag related delay in revenue increase even though cost are eventually passed into selling price. This drag down the quarter’s earnings. A new factory was completed in this period, adding capacity to the tight high utilization rate in some products
- The quarter’s revenue increased 4% and earnings fell 50% over preceding quarter. The increase in price of rubber latex plus weakening of US Dollar contributed to the lower earnings. Since more than 80% of the Group’s sales are in US Dollar, currency fluctuations increased the time-lag effect in any price increase exercise that the Group implemented
- Estimate next 4Q eps after 2010 Q4 result announced = 0.04*4 = 0.16, estimate PE on current price 2.44 = 11.34(DPS 0.07)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.055*4*0.95 = 0.209, estimate highest/lowest PE = 12.39/8.71 (DPS 0.07)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0434*4 = 0.1736*1.1(QbQ improvement adjustment) = 0.191, estimate highest/lowest PE = 16.81/11.78 (DPS 0.07)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.063*4 = 0.252, estimate highest/lowest PE = 15.36/11.35 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0372*4 = 0.1488, estimate highest/lowest PE = 28.83/18.28 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0319*4 = 0.1276, estimate highest/lowest PE = 23.2/11.36 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0272*4 = 0.1088, estimate highest/lowest PE = 19.39/7.77 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0232*4 = 0.092, estimate highest/lowest PE = 13.04/8.26 (DPS 0.06)
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