KLCI Stock - LPI / 8621 - 2010 Quarter 4

Company Info

Market Capital (Capital Size)	3,036,565,005 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(13.72-0.55)/0.7021 = 18.76 (High)
Target Price	11.23+0.55 = 11.78 (PE 16.0, EPS 0.7021, DPS 0.55)
Decision	NOT BUY unless revenue and profit increase more
Comment	Revenue decreased but higher than preceding year corresponding quarter, eps third consecutive quarter decreasing and also lower than preceding year corresponding quarter, free and net cash flow largely increased
First Support Price	13
Second Support Price	12.35
Risk Rating	MODERATE

Research House

OSK Target Price	12.3 (2011-01-12)
RHB Target Price	12.37 (2011-01-12)

Accounting Ratio

Return on Equity	11.89%
Dividend Yield	4.01%
Profit Margin	25.76%
Tax Rate	24.83%
Asset Turnover	0.37
Net Asset Value Per Share	5.37
Net Tangible Asset per share	5.37
Price/Net Tangible Asset Per Share	2.59
Cash Per Share	2.72
Liquidity Current Ratio	5.7618
Liquidity Quick Ratio	4.1339
Liquidity Cash Ratio	2.7701
Gearing Debt to Equity Ratio	0.9362
Gearing Debt to Asset Ratio	0.4835
Working capital per thousand Ringgit sale	124.1%
Days to sell the inventory	6038
Days to collect the receivables	119
Days to pay the payables	1172

My notes based on 2010 quarter 4 report (number in '000):-
- The Group's revenue and profit before tax for the current quarter and financial year ended 31 December 2010 increased as compared to the previous corresponding quarter and financial year in 2009

- For the current quarter and financial year ended 31 December 2010, the Group's revenue increased by 6.6% to RM190.7 million and by 7.7% to RM752.1 million respectively. The significant increase was mainly due to higher gross premium underwritten

- The Group's profit before tax also increased by 5.6% to RM49.1 million for the current quarter and by 12.4% to RM181.3 million for the financial year ended 31 December 2010. The increase in the current period was mainly due to higher investment income while the increase in the financial year ended 31 December 2010 was mainly attributed by higher underwriting profit

- For the fourth quarter ended 31 December 2010, the Group recorded higher profit before tax of RM49.1 million as compared to RM47.4 million in the preceding quarter ended 30 September 2010 despite registering a lower investment income for the said quarter. The underwriting results contributed positively to the fourth quarter

- Estimate next 4Q eps after 2010 Q4 result announced = 0.6383*1.1 = 0.7021, estimate PE on current price 13.72 = 18.76(DPS 0.37)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1685*4*1.05 = 0.7077, estimate highest/lowest PE = 19.57/15.42 (DPS 0.37)
- Estimate next 4Q eps after 2010 Q2 result announced = 1.0303(10% grow from 0.9366), estimate highest/lowest PE = 17.46/15.5 (DPS 0.5125)
- Estimate next 4Q eps after 2010 Q1 result announced = 1.0303(10% grow from 0.9366), estimate highest/lowest PE = 15.15/12.76 (DPS 0.675)
- Estimate next 4Q eps after 2009 Q4 result announced = 1.0533(15% grow from 0.9159), estimate highest/lowest PE = 12.94/11.53 (DPS 0.675)
- Estimate next 4Q eps after 2009 Q3 result announced = 1.0253, estimate highest/lowest PE = 13.23/11.16 (DPS 0.74)
- Estimate next 4Q eps after 2009 Q2 result announced = 1.0204, estimate highest/lowest PE = 11.43/10.25 (DPS 0.74)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.979, estimate highest/lowest PE = 10.88/8.63 (DPS 0.85)

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