KLCI Stock - HSPLANT / 5138 - 2010 Quarter 4

Company Info

Market Capital (Capital Size)	2,280,000,000 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(2.85-0.13)/0.2292 = 11.87 (Moderate)
Target Price	3.21+0.13 = 3.34 (PE 14.0, EPS 0.2292, DPS 0.13)
Decision	BUY
Comment	Revenue increased 38% and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 34.7%, eps increased 33.4% and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 38.4%, cash generated from operating is enough to cover all expenses and still got extra, liquidity ratio increased from low to moderate level now, gearing ratio decreased at low level now, all accounting periods are good, CPO price decreasing
First Support Price	2.7
Second Support Price	2.35
Risk Rating	MODERATE

Research House

Affin Target Price

4.02 (2011-01-27)

Accounting Ratio

Return on Equity	9.65%
Dividend Yield	4.56%
Profit Margin	47.63%
Tax Rate	25.84%
Asset Turnover	0.2345
Net Asset Value Per Share	2.2
Net Tangible Asset per share	2.2
Price/Net Tangible Asset Per Share	1.45
Cash Per Share	0.07
Liquidity Current Ratio	2.1813
Liquidity Quick Ratio	1.8387
Liquidity Cash Ratio	1.1477
Gearing Debt to Equity Ratio	0.1466
Gearing Debt to Asset Ratio	0.1279
Working capital per thousand Ringgit sale	12.8%
Days to sell the inventory	26
Days to collect the receivables	21
Days to pay the payables	43

My notes based on 2010 quarter 4 report (number in '000):-
- Revenue for the current quarter under review at RM157.4 million was 35% higher than the preceding year corresponding quarter. In tandem with the higher revenue, Group profit before tax [“PBT”] and profit after tax [“PAT”] for the current quarter at RM75.0 million and RM55.6 million were both higher than the preceding year corresponding quarter by 38%

- The significantly better performance in the current quarter was mainly attributable to higher average selling prices. Average selling price of Crude Palm Oil (CPO) and Palm Kernel (PK) realised for the current quarter were RM2,843 and RM2,029 per tonne which were higher than the preceding year corresponding quarter of RM2,252 and RM1,081 per tonne. CPO sales volume at 45,803 tonnes were higher than the preceding year corresponding quarter by 2% whilst PK sales volume at 9,635 tonnes were marginally lower than the preceding year corresponding quarter

- Overall, the Group PBT and PAT for the current financial year-to-date at RM226.4 million and RM170.1 million were higher than the preceding year corresponding period by 68% and 70% respectively

- Basic earnings per share for the current financial year-to-date at 21.26 sen was 70% above the preceding year corresponding period of 12.51 sen

- Group profit before tax for the current quarter at RM75.0 million was 40% higher than the preceding quarter of RM53.4 million mainly attributable to higher sales volume and higher average selling price of CPO and PK

- Estimate next 4Q eps after 2010 Q4 result announced = 0.0521*1.1*4 = 0.2292, estimate PE on current price 2.85 = 11.87(DPS 0.11)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0521*1.1*4 = 0.2292, estimate highest/lowest PE = 15.44/12.48 (DPS 0.11)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0454*1.1*4 = 0.1998, estimate highest/lowest PE = 15.42/10.76 (DPS 0.11)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0456*1.1*4 = 0.2006, estimate highest/lowest PE = 11.42/10.02 (DPS 0.09)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0396*4 = 0.1584, estimate highest/lowest PE = 15.4/12.31 (DPS 0.09)

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