KLCI Stock - OSK / 5053 - 2010 Quarter 4

Company Info

Market Capital (Capital Size)	1,627,871,160 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(1.69-0.075)/0.1092 = 14.79 (High)
Target Price	1.42+0.075 = 1.49 (PE 13.0, EPS 0.1092, DPS 0.075)
Decision	Not interested unless investment banking return profit
Comment	Revenue increased 18.3% and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 26.9% and in addition is highest since FY08Q3, eps increased 20.7% and is second consecutive quarter increasing but lower than preceding year corresponding quarter 23.1%, no cash generated from operating due to too many capital changes hence still need generate more cash from financing activities, weaker liquidity ratio at low level now, better gearing ratio, extra RM20 million gain from property investment segment, investment banking revenue largely increased but report loss, other segments revenue mostly better than FY09
First Support Price	1.65
Second Support Price	1.55
Risk Rating	HIGH

Accounting Ratio

Return on Equity	6.95%
Dividend Yield	4.44%
Profit Margin	18.34%
Tax Rate	13.10%
Asset Turnover	0.101
Net Asset Value Per Share	1.47
Net Tangible Asset per share	1.25
Price/Net Tangible Asset Per Share	1.38
Cash Per Share	1.72
Liquidity Current Ratio	1.2695
Liquidity Quick Ratio	0.6974
Liquidity Cash Ratio	0.2201
Gearing Debt to Equity Ratio	5.7473
Gearing Debt to Asset Ratio	0.831
Working capital per thousand Ringgit sale	196.3%
Days to sell the inventory	2459
Days to collect the receivables	1234
Days to pay the payables	4283

My notes based on 2010 quarter 4 report (number in '000):-
- The Group revenue for the financial year ended 31 December 2010 ("FY10") increased by 23% to RM1,012.21 million from RM820.37 million as compared to financial year ended 31 December 2009 ("FY09"). The Group profit before tax ("PBT") increased by 2% or RM3.95 million to RM194.97 million for FY10 from RM191.02 million in FY09. The profit after tax of the Group of RM151.26 million for FY10 represented a growth of 10% as compared to RM137.13 million in FY09

- OSKIB Group is the main contributor which accounted for 68% of the Group's PBT. The remaining PBT of 32% is made up of profits from other subsidiaries

- Investment Banking which consists mainly of Treasury, Corporate Advisory and Capital Market activities contributed PBT of RM61.05 million or 31% of the Group’s PBT for FY10 as compared to RM73.73 million or 39% in FY09

- Earnings from Loans and Financing contributed RM45.46 million or 23% of the Group's PBT as compared to RM32.53 million or 17% in FY09

- Equities & Futures broking recorded PBT of RM52.93 million or 27% of the Group's PBT as compared to RM73.46 million or 38% in FY09

- The Group recorded PBT of RM55.39 million for the fourth quarter ended 31 December 2010 as compared to RM57.49 million in third quarter of 2010

- Estimate next Q eps after 2010 Q4 result announced = 0.0993*1.1 = 0.1092(exclude RM20 million from property investment), estimate PE on current price 1.69 = 14.79(DPS 0.075)
- Estimate next Q eps after 2010 Q3 result announced = 0.0479*2*1.05 = 0.1006, estimate highest/lowest PE = 21.42/16.15 (DPS 0.075)
- Estimate next Q eps after 2010 Q2 result announced = 0.0479*2 = 0.0958, estimate highest/lowest PE = 19.43/12.08 (DPS 0.075)
- Estimate next Q eps after 2010 Q1 result announced = 0.039*4 = 0.156, estimate highest/lowest PE = 8.56/7.4 (DPS 0.075)
- Estimate next Q eps after 2009 Q4 result announced = 0.0449*4 = 0.1796, estimate highest/lowest PE = 8.21/6.38 (DPS 0.075)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0525*4 = 0.21, estimate highest/lowest PE = 8.38/6.9 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0570*4 = 0.228, estimate highest/lowest PE = 6.62/5.83 (DPS 0.05)
- After 2009 Q1 loss result announced, no estimate
- Estimate next 4Q eps after 2008 Q4 result announced = 0.0240*4 = 0.096, estimate highest/lowest PE = 14.32/7.86 (DPS 0.075)

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