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Thursday, February 17, 2011

KLCI Stock - MRCB / 1651 - 2010 Quarter 4

Company Info
Market Capital (Capital Size)3,140,684,915 (Large)
Par ValueRM 1.00

My Analysis
Forecast P/E now(2.27-0.015)/0.0905 = 24.92 (High)
Target Price1.90+0.015 = 1.92 (PE 21.0, EPS 0.0905, DPS 0.015)
DecisionNOT BUY unless revenue and profit maintain high in each quarter
Comment
Revenue second consecutive quarter largely increasing and higher than preceding year corresponding quarter, eps largely increased and higher than preceding year corresponding quarter, free cash flow decreased to negative but net cash flow increased, liquidity ratio decreasing to moderate level now, gearing ratio increasing to very high level now, receivables and payables period increasing to very high level now, construction division largely increased, property division increased but offset by infrastructure and building division
First Support Price2.15
Second Support Price2.0
Risk RatingHIGH

Research House
RHB Target Price2.65 (2011-01-10)
AMMB Target Price2.4 (2011-02-10)
CIMB Target Price3 (2011-02-10)
HwangDBS Target Price3.15 (2011-02-10)
Kenanga Target Price2.46 (2011-02-10)
MIDF Target Price2.46 (2011-02-10)
OSK Target Price2.58 (2011-02-10)

Accounting Ratio
Return on Equity5.09%
Dividend Yield0.66%
Profit Margin11.38%
Tax Rate20.48%
Asset Turnover0.2433
Net Asset Value Per Share0.99
Net Tangible Asset per share0.95
Price/Net Tangible Asset Per Share2.33
Cash Per Share0.58
Liquidity Current Ratio2.1343
Liquidity Quick Ratio1.8294
Liquidity Cash Ratio0.6332
Gearing Debt to Equity Ratio2.3844
Gearing Debt to Asset Ratio0.6989
Working capital per thousand Ringgit sale134.2%
Days to sell the inventory143
Days to collect the receivables515
Days to pay the payables335

My notes based on 2010 quarter 4 report (number in '000):-
- The Group recorded revenue of RM1,067.6 million for the current financial year ended 31 December 2010 as compared to RM921.6 million recorded in the preceding financial year ended 31 December 2009. Higher revenue recorded in the current year was contributed mainly from its construction and engineering division with ongoing work progress reaching maturity stage at relatively higher percentage of recognition compared to previous year. The same impact was also contributed by the Group’s ongoing property development projects at Kuala Lumpur Sentral

- Higher revenue as mentioned above coupled with the improved operational margin of its engineering and construction and property divisions had contributed to the Group recording a higher profit before taxation of RM97.6million for the current financial year ended 31 December 2010 compared to RM46.5 million achieved in the preceding financial year ended 31 December 2009

- The Group achieved a significant jump of over 100% increase in profit before taxation amounting to RM49.3 million for the current quarter ended 31 December 2010 compared to RM23.4 million recorded in the preceding corresponding 4th quarter ended 31 December 2009. The commendable result for the current quarter was mainly contributed by improved profit margin coupled with advanced stage of activities of its engineering and construction ongoing works and property development projects at Kuala Lumpur Sentral. Higher operational margin was achieved on the back of crystallization of its ongoing value engineering and efficient project supervision and cost saving initiatives

- Estimate next 4Q eps after 2010 Q4 result announced = 1067579*1.3*0.09/1380582 = 0.0905(profit margin per 9%, revenue yearly increase rate 30%), estimate PE on current price 2.27 = 24.92(DPS 0.015)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0188*4*1.1 = 0.0827(profit margin 8%, revenue increase rate 20%), estimate highest/lowest PE = 29.02/22.61 (DPS 0.01)
- Estimate next 5Q eps after 2010 Q2 result announced = 0.0129,0.0175,0.0202,0.0237,0.0313(calculation is based on receivables, revenue, 8% profit margin and 27% tax rate), exclude 0.0129 then cum_eps is 0.0927, estimate highest/lowest PE = 24.49/17.26 (DPS 0.01)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0743, estimate highest/lowest PE = 23.96/18.03 (DPS 0.01)

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