KLCI Stock - KELADI / 6769 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	132,704,250 (Small)
Par Value	RM 0.10

My Analysis

Forecast P/E now	(0.175-0.01)/0.017 = 9.71 (Moderate)
Target Price	0.17+0.01 = 0.18 (PE 10.0, EPS 0.017, DPS 0.01)
Decision	NOT BUY unless price below 0.16
Comment	Revenue increased and higher than preceding year corresponding quarter, eps same with revenue, positive free cash flow and positive net cash flow decreased, very strong liquidity ratio, very low gearing ratio
First Support Price	0.165
Second Support Price	0.15
Risk Rating	MODERATE

Accounting Ratio

Return on Equity	6.94%
Dividend Yield	5.71%
Profit Margin	45.67%
Tax Rate	25.03%
Asset Turnover	0.2877
Net Asset Value Per Share	0.24
Net Tangible Asset per share	0.24
Price/Net Tangible Asset Per Share	0.73
Cash Per Share	0.07
Liquidity Current Ratio	7.0899
Liquidity Quick Ratio	5.9057
Liquidity Cash Ratio	3.3321
Gearing Debt to Equity Ratio	0.0876
Gearing Debt to Asset Ratio	0.0787
Working capital per thousand Ringgit sale	166.5%
Days to sell the inventory	294
Days to collect the receivables	164
Days to pay the payables	119

My notes based on 2011 Quarter 3 report (number in '000):-
- For the nine months ended 31 October 2010, the Group reported revenue of RM43.996 million which was 1.09% lower than the preceding year’s corresponding quarter revenue of RM44.483 million. In line with the lower revenue, the profit before tax and non-controlling interests was RM15.390 million, a decrease of 4.34% from RM16.089 million achieved in the previous year’s corresponding quarter

- The decrease in revenue was because the Group sold more completed properties in previous year’s corresponding period. The lower profit was attributed to the higher development costs due to increase in the prices of construction material

- Our Group’s profit for the financial year was derived mainly from property development activities and sale of Fresh Fruit Bunches (FFB)

- The profit before tax and non-controlling interests for the quarter reported on was RM8.719 million, an increase of 247.50% compared to RM2.509 million achieved in the preceding quarter ended 31 July 2010. The increased in the profit before tax is mainly due to completion of our on-going phases of Taman Lagenda, sales of vacant land in Taman Delima, and reduction of administrative expenses

- In the immediate preceding quarter, the completed phases of on-going project were mainly low cost houses. Whereas, the majority properties completed in the current quarter are medium cost houses with higher profit margin. Therefore, the profits before tax for current quarter increased accordingly compared to immediate preceding quarter

- Estimate next 4Q eps after 2011 Q3 result announced = 0.017(recent 4 quarters eps), estimate PE on current price 0.175 = 9.71(DPS 0.01)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.0178*0.9 = 0.016, estimate highest/lowest PE = 12.19/9.06 (DPS 0.01)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0178 (based on last year), estimate highest/lowest PE = 8.99/7.87 (DPS 0.01)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0155 (13% drop from 0.0178), estimate highest/lowest PE = 10/9.03 (DPS 0.01)
- Estimate next 4Q eps after 2010 Q3 result announced = (0.0218+0.0289+0.019)/3 = 0.0232, estimate highest/lowest PE = 6.9/5.6 (DPS 0.015)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0031*4 = 0.0124, estimate highest/lowest PE = 12.5/10.48 (DPS 0.015)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0042*4 = 0.0168, estimate highest/lowest PE = 9.52/7.74 (DPS 0.015)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0031*4 = 0.0124, estimate highest/lowest PE = 14.11/8.06 (DPS 0.015)

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