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Tuesday, March 22, 2011

KLCI Stock - LATEXX / 7064 - 2010 Quarter 4

Company Info
Market Capital (Capital Size)614,022,299 (Medium)
Par ValueRM 0.50

My Analysis
Forecast P/E now(2.77-0.075)/0.2613 = 10.31 (Moderate)
Target Price2.87+0.075 = 2.95 (PE 11.0, EPS 0.2613, DPS 0.075)
DecisionBUY
Comment
Revenue decreased 17.8% and is second consecutive quarter decreasing but still higher than preceding year corresponding quarter 3.8%, eps decreased 41.4% and is second consecutive quarter decreasing and also lower than preceding year corresponding quarter 38.2%, both positive free and net cash flow increasing, low liquidity ratio but compared to historical still consider better, better gearing ratio at moderate level now, all accounting periods are good, benefit from latex price starting to drop, profit continue affecting by weakening of USD, privatisation on RM3.1 proposal
First Support Price2.65
Second Support Price2.4
Risk RatingMODERATE

Accounting Ratio
Return on Equity29.38%
Dividend Yield2.71%
Profit Margin16.18%
Tax Rate39.49%
Asset Turnover1.2388
Net Asset Value Per Share0.94
Net Tangible Asset per share0.86
Price/Net Tangible Asset Per Share3.26
Cash Per Share0.23
Liquidity Current Ratio1.5521
Liquidity Quick Ratio1.1059
Liquidity Cash Ratio0.5704
Gearing Debt to Equity Ratio0.6768
Gearing Debt to Asset Ratio0.4036
Working capital per thousand Ringgit sale11.8%
Days to sell the inventory42
Days to collect the receivables42
Days to pay the payables69

My notes based on 2010 quarter 4 report (number in '000):-
- The Group recorded revenue of RM106.79 million for 4Q10, a 3.8% growth from the same quarter a year ago. For the current quarter the Group achieved profit before tax of RM17.29 million, an increase of 2% from RM16.95 million in the same quarter last year. Profit after tax came in at RM10.46 million compare to RM16.49 million in the same quarter last year

- For the current year to date, the Group’s revenue increased 51.4% to RM497.32 million from RM328.47 million in the corresponding period last year. Profit before tax and profit after tax comparing to the same period last year has increased by 37.1 % and 63.8% respectively to RM84.82 million and RM70.35 million

- The increase in the Group’s revenue and improvement in the net profit of the current year was mainly due to the increase in overall sales volume, driven by the strong demand of gloves and the Group’s expanded capacity from 6 billion pieces per annum to 7 billion pieces per annum. The stronger performance was also attributed by measures taken to improve the effectiveness and efficiency in operation control; as well as intensified and aggressive marketing strategy

- For the current quarter, the Group’s revenue registered was RM106.79 million, 17.8% lower compare with RM129.88 million in the preceding quarter. Profit before tax was 14.3% lower at RM17.29 million compared to RM20.17 million recorded in the preceding quarter. Apart from the persistently high latex prices and weakening of US dollar that affected the Group’s profit margin, the decline in the Group’s revenue and profit were also due to lower sales of NR gloves and higher sales of nitrile gloves. EBITDA of the current quarter has increased 1.5%, i.e. 20.4% compare to 18.9% of the preceding quarter, attributed by higher sales of nitrile gloves. Profit after tax was 40.7% lower at RM10.46 million compared to RM17.63 million in the preceding quarter due to higher effective income tax rate of the current quarter compared to the preceding quarter

- Estimate next 4Q eps after 2010 Q4 result announced = 0.2751*0.95 = 0.2613, estimate PE on current price 2.77 = 10.31(DPS 0.075)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.3043*0.95 = 0.289, estimate highest/lowest PE = 9.91/8.15 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0824*4 = 0.3296+0.012(QbQ improvement adjustment) = 0.3416, estimate highest/lowest PE = 10.47/6.72 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0792*4 = 0.3168+0.02(QbQ improvement adjustment) = 0.3368, estimate highest/lowest PE = 11.46/9.62 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0675*4 = 0.27+0.02(QbQ improvement adjustment) = 0.29, estimate highest/lowest PE = 14.62/12.14 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0566*4 = 0.2264, estimate highest/lowest PE = 21.78/10.42 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0586*4 = 0.2344, estimate highest/lowest PE = 11.99/7.81 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.047*4 = 0.188, estimate highest/lowest PE = 10.37/4.2 (DPS 0.02)

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1 comment:

hng said...

Hi

Can you comment on P.I.E ?

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