KLCI Stock - GAB / 3255 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	3,141,819,200 (Large)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(10.4-0.45)/0.6845 = 14.54 (Moderate)
Target Price	10.95+0.45 = 11.40 (PE 16.0, EPS 0.6845, DPS 0.45)
Decision	BUY
Comment	Revenue decreased 16.5% and also lower than preceding year corresponding quarter 5.1%, eps decreased 24.3% but higher than preceding year corresponding quarter 4.9%, cash generated from operating is almost enough to cover dividend hence still increased borrowings to cover investing activities, stronger liquidity ratio at moderate level now, lower gearing ratio at below moderate level now, all accounting periods are good
First Support Price	10.0
Second Support Price	9.4
Risk Rating	MODERATE

Research House

UOB Target Price	10.3 (2011-02-21)
AMMB Target Price	9.9 (2011-05-06)
CIMB Target Price	11.3 (2011-05-06)
Maybank Target Price	11.3 (2011-05-06)
OSK Target Price	10.18 (2011-05-06)
TA Target Price	10.3 (2011-05-06)

Accounting Ratio

Return on Equity	36.99%
Dividend Yield	4.33%
Profit Margin	19.13%
Tax Rate	27.26%
Asset Turnover	1.9993
Net Asset Value Per Share	1.71
Net Tangible Asset per share	1.68
Price/Net Tangible Asset Per Share	6.1
Cash Per Share	0.44
Liquidity Current Ratio	2.7829
Liquidity Quick Ratio	2.3704
Liquidity Cash Ratio	0.7673
Gearing Debt to Equity Ratio	0.3998
Gearing Debt to Asset Ratio	0.2856
Working capital per thousand Ringgit sale	21.5%
Days to sell the inventory	22
Days to collect the receivables	71
Days to pay the payables	46

My notes based on 2011 quarter 3 report (number in '000):-
- The decline of revenue was mainly due to an earlier Chinese New Year

- Higher Group profit before tax for the same quarter mainly due to supply chain efficiencies

- Estimate next 4Q eps after 2011 Q3 result announced = 0.6223*1.1 = 0.6845, estimate PE on current price 10.4 = 14.54(DPS 0.45)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.6139*0.95 = 0.5832, estimate highest/lowest PE = 16.99/14.92 (DPS 0.45)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.545, estimate highest/lowest PE = 19.36/15.32 (DPS 0.45)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.5054*1.05 = 0.5307 (5% grow from 0.5054, due to next year no more world cup), estimate highest/lowest PE = 15.81/14.23 (DPS 0.45)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.517 (10% grow from 0.47), estimate highest/lowest PE = 14.99/12.55 (DPS 0.41)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.517, estimate highest/lowest PE = 13.17/12.13 (DPS 0.41)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.47, estimate highest/lowest PE = 15.23/13.17 (DPS 0.41)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.47, estimate highest/lowest PE = 15.47/12.9.6 (DPS 0.41)

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