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Friday, June 3, 2011

KLCI Stock - HOMERIZ / 5160 - 2011 Quarter 2

Company Info
Market Capital (Capital Size)68,000,000 (Very Small)
Par ValueRM 0.20

My Analysis
Forecast P/E now(0.34-0.02)/0.0514 = 6.23 (High)
Target Price0.31+0.02 = 0.33 (PE 6.0, EPS 0.0514, DPS 0.02)
DecisionNot interested unless revenue and profit increase more
Revenue decreased 20.4% and also lower than preceding year corresponding quarter 34.8%, eps decreased 50.6% and is continuing decreasing to lowest all the time(lower than preceding year corresponding quarter 68.3%), cash generated from operating is more than enough to cover financing activities but still over spent in investing activities, weaker liquidity ratio but still at high level now, higher gearing ratio at below moderate level now, all accounting periods are good except inventory increased but working capital did not increase, affecting by weakeaning USD dollar against Ringgit
First Support Price0.34
Second Support Price0.34
Risk RatingHIGH

Accounting Ratio
Return on Equity25.13%
Dividend Yield6.18%
Profit Margin9.15%
Tax Rate4.49%
Asset Turnover1.2169
Net Asset Value Per Share0.29
Net Tangible Asset per share0.29
Price/Net Tangible Asset Per Share1.41
Cash Per Share0.08
Liquidity Current Ratio3.2877
Liquidity Quick Ratio1.6641
Liquidity Cash Ratio1.247
Gearing Debt to Equity Ratio0.3131
Gearing Debt to Asset Ratio0.2385
Working capital per thousand Ringgit sale31.3%
Days to sell the inventory97
Days to collect the receivables19
Days to pay the payables38

My notes based on 2011 quarter 2 report (number in '000):-
- The decrease in turnover was mainly due to lower sales volume and the weakening of the US dollar

- Lower profit mainly attributed by lower revenue generated in current quarter, the continued weakening of the US dollar coupled with the time lag in passing on the higher costs to its customers, bonus payout to employees in Q22011 and the increase of international furniture exhibition expenditure incurred

- In FY2010, revenue recorded RM110 million and profit RM21.7 million
- In FY2009, revenue recorded RM108.4 million and profit RM22.7 million
- In FY2008, revenue recorded RM92.6 million and profit RM12.4 million
- In FY2007, revenue recorded RM73.8 million and profit RM10.5 million

- Revenue regions percentage: Europe-60%, Australasia-26%, North & South America-8%, Others-6%

- Revenue products percentage: Upholstered Sofas-55%, Upholstered Dining Chairs-30%, Upholstered Bed Frames-13%, Others-2%

- Dividend policy envisage not less than 40% of net profit, intends to recommend and distribute at least 50% of net profits

- Estimate next 4Q eps after 2011 Q2 result announced = (0.0172+0.0085)*2 = 0.0514, estimate PE on current price 0.34 = 6.23(DPS 0.02)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0172*4*1.05 = 0.0722(revenue incrreased, improved balance sheet), estimate highest/lowest PE = 6.09/4.57 (DPS 0.04)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0207*4 = 0.0828, estimate highest/lowest PE = 7/4.29 (DPS 0.04)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0242*4*0.95 = 0.092, estimate highest/lowest PE = 6.47/4.35 (DPS 0.04)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0268*4*0.95 = 0.1018, estimate highest/lowest PE = 6.04/4.91 (DPS 0.04)

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