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Sunday, May 22, 2011

KLCI Stock - PROTON / 5304 - 2011 Quarter 3

Company Info
Market Capital (Capital Size)1,867,324,206 (Large)
Par ValueRM 1.00

My Analysis
Forecast P/E now(3.4-0.1)/0.2326 = 14.19 (High)
Target Price3.02+0.1 = 3.12 (PE 13.0, EPS 0.2326, DPS 0.1)
DecisionNot interested unless revenue and profit higher than FY11Q2
Revenue decreased 18.2% and is second consecutive quarter decreasing but also lower than preceding year corresponding quarter 9%, eps decreased 191.2% and is second consecutive quarter decreasing and also lower than preceding year corresponding quarter 175.4%, no cash generated from operating but still largely spent in investing hence increased borrowing, weaker liquidity ratio at low level now, higher gearing ratio at below moderate level now, all accounting periods are good, higher inventory expect higher revenue in next coming quarter, Malaysia revenue decreased
First Support Price3.4
Second Support Price3.16
Risk RatingHIGH

Research House
Affin Target Price4.6 (2010-11-26)
HwangDBS Target Price4.7 (2011-01-10)
UOB Target Price3.75 (2011-02-17)
Maybank Target Price3.4 (2011-02-28)
RHB Target Price4 (2011-02-28)
TA Target Price4.52 (2011-02-28)
CIMB Target Price4.5 (2011-03-03)
AMMB Target Price5.1 (2011-03-04)
MIDF Target Price5.2 (2011-04-18)
OSK Target Price4.78 (2011-04-18)

Accounting Ratio
Return on Equity2.12%
Dividend Yield5.88%
Profit Margin-2.81%
Tax Rate-
Asset Turnover1.1421
Net Asset Value Per Share9.73
Net Tangible Asset per share7.96
Price/Net Tangible Asset Per Share0.51
Cash Per Share1.76
Liquidity Current Ratio1.7076
Liquidity Quick Ratio0.9316
Liquidity Cash Ratio0.4521
Gearing Debt to Equity Ratio0.413
Gearing Debt to Asset Ratio0.2923
Working capital per thousand Ringgit sale17.6%
Days to sell the inventory69
Days to collect the receivables41
Days to pay the payables65

My notes based on 2011 quarter 3 report (number in '000):-
- The decline in profit is largely attributable to higher branding costs as well as restructuring expenses incurred by Lotus Group International Limited ("LGIL"). As part of the transformation plans to turn around LGIL, the Group started investing in rationalization of dealers network and branding activities to deliver the 5-year business plans

- During the quarter, the Group experienced lower domestics sales volume as well as increased promotional and marketing spending by a principal subsidiary

- Estimate next 4Q eps after 2011 Q3 result announced = 0.12*0.95*3-0.1094 = 0.2326(estimate average 5% lower profit from FY11Q2 for next 3 quarter and FY12Q3 still loss), estimate PE on current price 3.4 = 14.19(DPS 0.1)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.4608, estimate highest/lowest PE = 10.37/8.33 (DPS 0.2)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.4902*0.95 = 0.4657, estimate highest/lowest PE = 10.37/9.28 (DPS 0.2)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.4353*1.05 = 0.4571(5% increase), estimate highest/lowest PE = 10.44/9.52
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1451*4 = 0.5804, estimate highest/lowest PE = 8.67/6.89
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1494*4 = 0.5976, estimate highest/lowest PE = 7.16/6.12 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0993*4 = 0.3972, estimate highest/lowest PE = 11.15/7.25 (DPS 0.05)

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