KLCI Stock - HARTA / 5168 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	2,053,698,725 (Large)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(5.65-0.14)/0.5944 = 9.27 (Moderate)
Target Price	6.54+0.14 = 6.68 (PE 11.0, EPS 0.5944, DPS 0.14)
Decision	BUY
Comment	Revenue continuos increasing all the time, eps increased but lower than preceding year corresponding quarter, free cash flow increasing positive net cash flow decreased , better liquidity ratio at moderate level now, low gearing ratio, better working capital, all accounting period are good, USD against MYR weakening, production lines increasing, desease under control
First Support Price	5.4
Second Support Price	4.9
Risk Rating	LOW

Research House

Maybank Target Price	6.8 (2011-01-19)
CIMB Target Price	8.43 (2011-01-26)
OSK Target Price	7.4 (2011-02-08)

Accounting Ratio

Return on Equity	43.16%
Dividend Yield	2.48%
Profit Margin	33.07%
Tax Rate	20.89%
Asset Turnover	1.155
Net Asset Value Per Share	1.26
Net Tangible Asset per share	1.26
Price/Net Tangible Asset Per Share	4.47
Cash Per Share	0.36
Liquidity Current Ratio	2.963
Liquidity Quick Ratio	2.3651
Liquidity Cash Ratio	1.4438
Gearing Debt to Equity Ratio	0.3335
Gearing Debt to Asset Ratio	0.2499
Working capital per thousand Ringgit sale	25.1%
Days to sell the inventory	42
Days to collect the receivables	43
Days to pay the payables	46

My notes based on 2011 quarter 3 report (number in '000):
- Quarter to quarter, the Group’s sales revenue increased by 26.6% and profit before tax increased by 31.0%. The significant achievement in revenue and profit before tax is in line with the Group’s continuous expansion in production capacity, increase in demand, effective cost control and improvement in production processes

- In the current quarter, the Group's revenue was 2.1% higher and the profit before tax was 1.9% higher when compared to the preceding quarter. The increase in profit before tax is due to increase in demand for nitrile gloves

- Estimate next 4Q eps after 2011 Q3 result announced = 0.1351*4*1.1 = 0.5944, estimate PE on current price 5.33 = 9.12(DPS 0.14)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.1293*4*1.1 = 0.5689, estimate highest/lowest PE = 9.86/8.28 (DPS 0.14)
- Estimate next 4Q eps after 2012 Q1 result announced = 0.1708*4*1.05 = 0.7174, estimate highest/lowest PE = 11.15/8.24 (DPS 0.15)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.1915*4 = 0.766, estimate highest/lowest PE = 10.91/9.43 (DPS 0.19)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1535*4 = 0.614, estimate highest/lowest PE = 13.65/10.78 (DPS 0.15)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1366*4 = 0.5464, estimate highest/lowest PE = 13.95/9.9 (DPS 0.15)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.1088*4 = 0.4352, estimate highest/lowest PE = 12.59/10.78 (DPS 0.15)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.512, estimate highest/lowest PE = 10.55/6.01 (DPS 0.12)

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