KLCI Stock - AIRPORT / 5014 - 2010 Quarter 4

Company Info

Market Capital (Capital Size)	6,655,000,000 (Very Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(6.05-0.08)/0.3362 = 17.76 (High)
Target Price	5.38+0.08 = 5.46 (PE 16.0, EPS 0.3362, DPS 0.08)
Decision	NOT BUY unless revenue and profit increase more
Comment	Revenue largely increasing and also higher than preceding year corresponding quarter, eps largely increasing but still lower than preceding year corresponding quarter, free cash flow more negative but positive net cash flow largely increasing, passenger traffic increasing, cargo volume decreased, KLIA2 target completed by April 2012
First Support Price	6.0
Second Support Price	5.8
Risk Rating	MODERATE

Research House

HLG Target Price	6.58 (2010-12-28)
Macquarie Target Price	7.5 (2011-01-14)
OSK Target Price	8.47 (2011-02-11)
Maybank Target Price	7.12 (2011-02-14)
Kenanga Target Price	6.64 (2011-02-17)
MIDF Target Price	7.2 (2011-02-17)
TA Target Price	6.6 (2011-02-17)
RHB Target Price	7.67 (2011-03-07)

Accounting Ratio

Return on Equity	8.93%
Dividend Yield	1.32%
Profit Margin	31.06%
Tax Rate	34.46%
Asset Turnover	0.2559
Net Asset Value Per Share	2.99
Net Tangible Asset per share	2.99
Price/Net Tangible Asset Per Share	2.07
Cash Per Share	1.46
Liquidity Current Ratio	3.244
Liquidity Quick Ratio	3.1642
Liquidity Cash Ratio	2.1025
Gearing Debt to Equity Ratio	1.1555
Gearing Debt to Asset Ratio	0.5357
Working capital per thousand Ringgit sale	94.5%
Days to sell the inventory	37
Days to collect the receivables	163
Days to pay the payables	437

My notes based on 2010 quarter 4 report (number in '000):-
- The consolidated revenue of the Group for the current quarter under review was 3.7% higher than the corresponding period in the previous year

- The improved revenue in the current quarter was mainly attributed to stronger results from the Group’s airport operations, driven by strong recovery in air travel demand. Passenger movements for the current quarter were 6.5% higher than the corresponding period in the previous year, in which the international and domestic passenger movements increased by 12.0% and 1.8% respectively

- The positive variance in revenue was also contributed by growth in the Group’s retail business as well as higher rental revenue derived from additional commercial spaces

- The consolidated revenue of the Group for the current quarter under review improved by 10.8% as compared with the immediate preceding quarter, which was mainly contributed by higher revenue from retail, project & repair maintenance and aeronautical revenue. Aeronautical and retail revenue improved in tandem with stronger passenger numbers, with total passenger movements for the current quarter being 6.5% higher than the immediate preceding quarter, in which international and domestic passenger movements improved by 5.5% and 7.6% respectively

- Profit before tax and zakat for the current quarter under review was higher than the immediate preceding quarter by 68.1%, mainly due to a huge increase in revenue contrasted by a marginal increase in total costs. Total costs increased by 6.5% arising mainly from utilities, staff costs and cost of direct materials incurred by the retail segment. The higher direct material was in line with the higher retail revenue. Provision for doubtful debt was, however, reduced in the current quarter as a result of settlements made by debtors. In addition, the positive variance was also contributed by lower share of loss recorded by an associate company

- Estimate next 4Q eps after 2010 Q4 result announced = 0.0764*4*1.1 = 0.3362(deduct 16 million other income for adjustment), estimate PE on current price 6.05 = 17.76(DPS 0.08)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.06*4*1.1 = 0.264(associates increasing loss), estimate highest/lowest PE = 23.49/21.41 (DPS 0.149)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.3233*0.95 = 0.3071, estimate highest/lowest PE = 19.12/16.55 (DPS 0.229)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.3429*0.9 = 0.3086 (10% drop from 0.3429), estimate highest/lowest PE = 17.24/14.81 (DPS 0.229)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.086*4 = 0.344, estimate highest/lowest PE = 13.97/12.89 (DPS 0.233)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0758*4 = 0.3032, estimate highest/lowest PE = 15.72/11.36 (DPS 0.233)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.068*4 = 0.272, estimate highest/lowest PE = 13.18/11.6 (DPS 0.1855)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0695*4 = 0.278, estimate highest/lowest PE = 13.07/10.27 (DPS 0.1855)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.069*4 = 0.276, estimate highest/lowest PE = 12.37/7.63 (DPS 0.1855)

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