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Thursday, May 19, 2011

KLCI Stock - P&O / 6009 - 2011 Quarter 1

Company Info
Market Capital (Capital Size)195,492,090 (Small)
Par ValueRM 0.50

My Analysis
Forecast P/E now(0.795-0.0060)/0.1108 = 7.12 (Moderate)
Target Price0.89+0.0060 = 0.89 (PE 8.0, EPS 0.1108, DPS 0.0060)
DecisionBUY
Comment
Revenue decreased 3% and also lower than preceding year corresponding quarter 0.7%, eps decreased 60.8% but higher than preceding year corresponding quarter 120.1%, largely over spent in operating activities, weaker liquidity ratio but still at strong level now, higher gearing ratio at very high level now, all accounting periods are acceptable, insurance division maintaining high profit
First Support Price0.78
Second Support Price0.71
Risk RatingMODERATE

Accounting Ratio
Return on Equity20.60%
Dividend Yield0.75%
Profit Margin12.18%
Tax Rate31.26%
Asset Turnover0.4801
Net Asset Value Per Share0.79
Net Tangible Asset per share0.78
Price/Net Tangible Asset Per Share1.12
Cash Per Share2.55
Liquidity Current Ratio5.0483
Liquidity Quick Ratio4.2347
Liquidity Cash Ratio3.6378
Gearing Debt to Equity Ratio4.163
Gearing Debt to Asset Ratio0.8063
Working capital per thousand Ringgit sale144.2%
Days to sell the inventory122
Days to collect the receivables78
Days to pay the payables51

My notes based on 2011 quarter 1 report (number in '000):-
- Group revenue was RM114,730,000 compared to RM115,514,000 in the corresponding quarter of the last financial year. The decrease was mainly attributable to lower gross premium recorded by the insurance subsidiary. Profit before tax of RM13,975,000 was reported compared to pre-tax loss of RM27,495,000 in the corresponding quarter of the last financial year. This was mainly attributable to lower net claims incurred during the current quarter as compared to that in the corresponding quarter of the last financial year, recorded at the insurance subsidiary

- Group revenue of RM114,730,000 was lower than the RM118,309,000 reported in the preceding quarter. This was mainly attributable to lower gross premium recorded by the insurance subsidiary. Profit before tax of RM13,975,000 was lower compared to the pre-tax profit of RM26,882,000 in the preceding quarter due mainly to higher net claims incurred during the current quarter as compared to that in the preceding quarter, recorded at the insurance subsidiary

- Estimate next 4Q eps after 2011 Q1 result announced = 0.0277*4 = 0.1108(ROE 3.5% per quarter), estimate PE on current price 0.795 = 7.12(DPS 0.006)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.05*4/2 = 0.1(ROE 3.5% per quarter), estimate highest/lowest PE = 9.6/7.7

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