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Wednesday, February 16, 2011

KLCI Stock - SPSETIA / 8664 - 2010 Quarter 4

Company Info
Market Capital (Capital Size)6,450,040,958 (Very Large)
Par ValueRM 0.75

My Analysis
Forecast P/E now(6.34-0.2)/0.22 = 27.91 (High)
Target Price4.62+0.2 = 4.82 (PE 21.0, EPS 0.22, DPS 0.2)
DecisionNOT BUY unless core business profit increase more instead of investment gain
Comment
Revenue third consecutive quarter increasing and is historical highest, eps second consecutive quarter increasing and is highest since FY08Q1, but if exclude investment gain then actually lower than preceding quarter and higher than preceding year corresponding quarter, free cash flow decreased and negative net cash flow increased, liquidity increasing at moderate level now, gearing ratio increased at above moderate level now, inventory period decreasing and other accounting period as usual, property development segment profit largely increased but half of it offset by the rest of the segments
First Support Price6.3
Second Support Price5.5
Risk RatingMODERATE

Research House
HwangDBS Target Price7.7 (2011-01-13)
RHB Target Price8.05 (2011-01-17)
CIMB Target Price8.06 (2011-01-18)
ECM Target Price6 (2011-01-18)
Maybank Target Price7.15 (2011-01-18)
MIDF Target Price6 (2011-01-18)
TA Target Price6.95 (2011-01-18)
AMMB Target Price7.1 (2011-01-19)
OSK Target Price7.23 (2011-01-27)

Accounting Ratio
Return on Equity11.50%
Dividend Yield3.15%
Profit Margin18.17%
Tax Rate25.86%
Asset Turnover0.398
Net Asset Value Per Share2.11
Net Tangible Asset per share2.11
Price/Net Tangible Asset Per Share2.64
Cash Per Share1.01
Liquidity Current Ratio2.304
Liquidity Quick Ratio1.5704
Liquidity Cash Ratio0.8986
Gearing Debt to Equity Ratio1.0034
Gearing Debt to Asset Ratio0.5008
Working capital per thousand Ringgit sale88.0%
Days to sell the inventory217
Days to collect the receivables158
Days to pay the payables134

My notes based on 2010 quarter 4 report (number in '000):-
- The Group reported a profit after taxation of RM75.2 million for Q4 2010, which is 32% higher than RM56.9 million reported for Q4 2009. The higher profit includes gain from the disposal of Tesco Hypermarket in Bukit Indah Johor, an Investment Property of the Group

- The Group’s current quarter profit before taxation is RM101.4 million, which is RM4.8 million lower than the preceding quarter ended 31 July 2010. This was due to higher profit recognised on the disposal of an Investment Property by the Group in Setia Alam in the preceding quarter

- Estimate next 4Q eps after 2010 Q4 result announced = 0.05*4*1.1 = 0.22(assume investment gain only RM6 million), estimate PE on current price 6.34 = 27.91(DPS 0.2)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0439(after exclude RM48 million other income and used 27% VAT)*4*1.1 = 0.1932, estimate highest/lowest PE = 28.47/22.31 (DPS 0.15)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1841 (10% increase from 0.1674), estimate highest/lowest PE = 24.06/20.53 (DPS 0.15)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.1724 (3% increase from 0.1674), estimate highest/lowest PE = 24.01/20.19 (DPS 0.14)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.16, estimate highest/lowest PE = 26.25/21.5 (DPS 0.14)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.16, estimate highest/lowest PE = 27.63/21 (DPS 0.15)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.16, estimate highest/lowest PE = 28.56/22.81 (DPS 0.15)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.16, estimate highest/lowest PE = 28.69/16.19 (DPS 0.17)

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