KLCI Stock - CSCSTEL / 5094 - 2010 Quarter 1

Company Info

Market Capital (Capital Size)	661,200,000 (Medium)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(1.74-0.13)/0.1483 = 10.86 (High)
Target Price	1.48+0.13 = 1.61 (PE 10.0, EPS 0.1483, DPS 0.13)
Decision	Not interested unless profit increase more to show that increase cost is not big impact
Comment	Revenue increased 19.2% and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 9.5%, eps increased 181.2% and is second consecutive quarter increasing but still lower than preceding year corresponding quarter 21.5%, no cash generate from operating after deduct the expenses for inventories and receivables, mainly using Group's cash to cover all expenses, stronger liquidity ratio at very strong level now, lower gearing ratio at very low level now, all accounting periods are good, raw materials increased sharply
First Support Price	1.7
Second Support Price	1.6
Risk Rating	MODERATE

Research House

HLG Target Price	1.81 (2011-05-12)
OSK Target Price	1.97 (2011-05-16)

Accounting Ratio

Return on Equity	7.86%
Dividend Yield	7.47%
Profit Margin	10.34%
Tax Rate	24.68%
Asset Turnover	1.1902
Net Asset Value Per Share	2.18
Net Tangible Asset per share	2.18
Price/Net Tangible Asset Per Share	0.8
Cash Per Share	0.59
Liquidity Current Ratio	17.2138
Liquidity Quick Ratio	11.2532
Liquidity Cash Ratio	6.4875
Gearing Debt to Equity Ratio	0.0947
Gearing Debt to Asset Ratio	0.0865
Working capital per thousand Ringgit sale	52.3%
Days to sell the inventory	79
Days to collect the receivables	56
Days to pay the payables	13

My notes based on 2011 quarter 1 report (number in '000):-
- The increase in revenue is due to increase in sales volume of our steel products albeit at lower selling prices. The drop in profit before tax is due to lower selling prices of our steel products

- Estimate next 4Q eps after 2011 Q1 result announced = 0.1483, estimate PE on current price 1.74 = 10.86(DPS 0.13)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.1854*0.8 = 0.1483, estimate highest/lowest PE = 11.4/10.32 (DPS 0.13)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.18*0.9 = 0.162, estimate highest/lowest PE = 10.19/9.57 (DPS 0.14)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.2936*0.9 = 0.2642 (10% decrease due to global steel price decreasing), estimate highest/lowest PE = 6.55/5.6 (DPS 0.2)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.2936 (maintained forecast eps due to lower margin), estimate highest/lowest PE = 5.99/4.67 (DPS 0.2)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.2936 (20% growth from 0.2442, world steel price increasing), estimate highest/lowest PE = 6.13/4.6 (DPS 0.2)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.24, estimate highest/lowest PE = 6.42/4.92 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.1012, estimate highest/lowest PE = 13.83/9.88 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0612, estimate highest/lowest PE = 18.3/15.44

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