KLCI Stock - KENCANA / 5122 - 2011 Quarter 3

KENCANA PETROLEUM BERHAD

Company Description

KENCANA PETROLEUM BERHAD is a Malaysia-based investment holding company. The Company is engaged in providing engineering and fabrication services, as well as marine engineering and operations services businesses. Through marine engineering, it is involved in building, refurbishing, repairing and converting marine vessels. The Company provides offshore drilling services, as well as charter of vessels and rigs, through its operations service business. Its subsidiaries include Kencana HL Sdn. Bhd., Kencana Marine Sdn. Bhd., Kencana Metering Sdn. Bhd., Kencana Infrastructure Sdn. Bhd. and Kencana Steelworks Sdn. Bhd., among others. The principal activities of the subsidiaries include integrated engineering and fabrication of oil and gas production facilities and drilling rigs; operation and management of fabrication yard; metering works, process skid systems and pipeline construction, and property investment. On September 5, 2007, the Company acquired Kencana Petroleum Ventures Sdn. Bhd.

Company Info

Listing Date	2006-12-15
Market Capital (Capital Size)	5,127,405,081 (Very Large)
Par Value	RM 0.10
Board	Main
Sector	Trading/Services
Major Industry	Oil & Gas Services
Sub Industry	Offshore Drilling & Marine Services
Website	http://www.kencanapetroleum.com.my/

My Analysis

Forecast P/E now	(2.79-0.0050)/0.1109 = 25.11 (High)
Target Price	2.33+0.0050 = 2.33 (PE 21.0, EPS 0.1109, DPS 0.0050)
Decision	Not interested unless revenue and profit increase more
Comment	Revenue increased 7.2% and is highest since FY08Q3(higher than preceding year corresponding quarter 34.8%), eps decreased 8.7% and is second consecutive quarter decreasing but higher than preceding year corresponding quarter 31.9%, cash generated from operating not enough to cover investing expenses hence generated more cash from financing activities, stronger liquidity ratio but still at low level now, lower gearing ratio at above moderate level now, all accounting ratio improved, more work from Petronas
First Support Price	2.6
Second Support Price	2.45
Risk Rating	MODERATE

Research House

Maybank Target Price	3.1 (2011-01-06)
Affin Target Price	3.21 (2011-01-27)
TA Target Price	3.7 (2011-03-18)
CIMB Target Price	3.4 (2011-03-30)
RHB Target Price	3.5 (2011-03-30)
AMMB Target Price	3.4 (2011-04-27)
OSK Target Price	3.17 (2011-05-16)
UOB Target Price	2.44 (2011-06-07)
MIDF Target Price	3.16 (2011-06-23)

Accounting Ratio

Return on Equity	17.78%
Dividend Yield	0.18%
Profit Margin	18.47%
Tax Rate	19.13%
Asset Turnover	0.565
Net Asset Value Per Share	0.6
Net Tangible Asset per share	0.59
Price/Net Tangible Asset Per Share	4.73
Cash Per Share	0.36
Liquidity Current Ratio	1.649
Liquidity Quick Ratio	1.6224
Liquidity Cash Ratio	1.1543
Gearing Debt to Equity Ratio	0.8378
Gearing Debt to Asset Ratio	0.4555
Working capital per thousand Ringgit sale	33.8%
Days to sell the inventory	6
Days to collect the receivables	89
Days to pay the payables	149

My notes based on 2011 quarter 3 report (number in '000):-
- Higher revenue and pbt than corresponding quarter mainly due to higher progress achieved for contracts in hand on the back of bigger order book and better management of relevant costs as well as contribution from drilling services

- Higher pbt than preceding quarter mainly due to better management of relevant costs (but lower diluted eps due to more share going to increase)

- Estimate next 4Q eps after 2011 Q3 result announced = 0.0252*4*1.1 = 0.1109, estimate PE on current price 2.79 = 25.11(DPS 0.005)
- Estimate next 4Q eps after 2011 Q2 result announced = (0.0314+0.0276)*2*1.1 = 0.1298, estimate highest/lowest PE = 22.46/19.53 (DPS 0.005)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0563*2*1.1 = 0.1239, estimate highest/lowest PE = 23.85/17.39 (DPS 0.005)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0249*4*1.1 = 0.1096, estimate highest/lowest PE = 20.39/14.92 (DPS 0.005)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0191*4 = 0.0764, estimate highest/lowest PE = 22.19/18.26 (DPS 0.005)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.02*4 = 0.08, estimate highest/lowest PE = 20.94/15.69 (DPS 0.005)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0339*4 = 0.1356, estimate highest/lowest PE = 18.47/9.92 (DPS 0.005)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.1307, estimate highest/lowest PE = 19.09/16.03 (DPS 0.005)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0324*4 = 0.1296, estimate highest/lowest PE = 17.32/12.77 (DPS 0.005)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0301*4 = 0.1204, estimate highest/lowest PE = 16.07/9.34 (DPS 0.005)

KENCANA latest news (English)

KENCANA latest news (Chinese)



Financial Quarter Summary

a_date	year	qrt	h_price	l_price	div	roe	c_roe	rev	c_rev	pbt	c_pbt	prof	c_prof	eps	c_eps	asset	liab	mino	equi	cfo	cfi	cff	cash	fcf	net	final	share	c_share	m_cap	date	prof_m	vat	asset_t	pe	navps	ntaps	p/ntaps	cps	l_cur	l_qui	l_cash	g_de	g_da	avg_w	inv_d	rec_d	pay_d
2011-06-24	2011	3	N/A	N/A	-	4.35%	12.29%	377828	1067281	69773	199856	56424	159388	0.0252	0.0742	2381260	1084677	1863	1296583	381199	559526	767677	178950	178327	589350	768300	2236424	2147718	6239622	2011-04-30	18.47%	19.13%	0.565	-	0.6	0.59	4.73	0.36	1.649	1.6224	1.1543	0.8378	0.4555	33.8%	6	89	149
2011-03-17	2011	2	2.92	2.54	-	5.87%	11.95%	352494	689453	61989	130083	50607	102964	0.0276	0.0562	1784846	923046	1863	861800	353067	448368	198738	188186	95301	103437	291623	1833285	1831110	4656543	2011-01-31	17.59%	18.36%	0.6992	-	0.47	0.45	5.64	0.17	0.9174	0.8823	0.4372	1.0734	0.5172	-4.8%	9	93	171
2010-12-13	2011	1	2.96	2.16	-	6.47%	6.47%	336959	336959	68094	68094	52357	52357	0.0314	0.0314	1612290	803225	1863	809065	310688	412744	87891	194686	102056	14165	180521	1666752	1666752	3650186	2010-10-31	20.21%	23.11%	0.7106	-	0.48	0.46	4.76	0.14	0.7146	0.6793	0.3062	0.9951	0.4982	-18.3%	10	85	171
2010-09-29	2010	4	2.24	1.64	0.0050	5.49%	17.97%	278184	1089698	51235	171340	41477	135776	0.0249	0.1062	1375096	619711	1895	755385	57476	294977	223190	229521	237501	14311	215210	1665306	1277963	2764407	2010-07-31	18.42%	18.86%	0.7925	15.6244	0.59	0.56	2.96	0.13	1.4476	1.398	0.4042	0.8225	0.4507	22.6%	11	180	146
2010-06-28	2010	3	1.7	1.4	-	4.39%	13.29%	280373	811514	36532	120106	31177	94300	0.0191	0.0822	1208871	499237	-1300	709634	99292	157437	201491	229521	58145	143346	372867	1630501	1146859	2396836	2010-04-30	13.03%	14.66%	0.8848	-	0.62	0.59	2.49	0.25	1.5704	1.5009	0.9439	0.7022	0.413	22.6%	12	78	100
2010-03-25	2010	2	1.68	1.26	-	4.86%	9.72%	250138	531141	42471	86544	33039	66093	0.0199	0.0399	1334953	654991	-1300	679962	167005	70253	223543	229521	96752	320295	549816	1657596	1655600	2635577	2010-01-31	16.98%	22.21%	0.8086	-	0.41	0.39	4.08	0.35	1.7891	1.7248	1.1845	0.9614	0.4906	35.7%	13	89	152
2009-12-21	2010	1	2.51	1.35	-	6.67%	6.67%	281003	281003	41845	41845	30826	30826	0.0339	0.0339	1104271	642035	-1300	462236	101605	56764	77583	229521	44841	122424	351945	909099	909077	2045472	2009-10-31	14.89%	26.56%	0.9992	-	0.51	0.47	4.79	0.42	1.3623	1.3027	0.8057	1.3851	0.5814	15.6%	11	78	126
2009-09-30	2009	4	2.5	2.1	0.0050	7.05%	27.56%	258091	1140843	38913	152805	30250	118202	0.0334	0.1307	944941	516024	-	428917	13128	68815	58568	226640	55687	2881	229521	905163	904705	1918945	2009-07-31	15.08%	22.26%	1.2073	16.2262	0.47	0.43	4.93	0.28	1.6209	1.5365	0.7575	1.2031	0.5461	18.2%	11	83	103
2009-06-22	2009	3	2.25	1.66	-	6.96%	22.14%	290170	882752	35054	113892	27640	87952	0.0305	0.0972	873139	475915	-	397224	53015	73750	49042	226640	20735	28307	254947	904753	904753	1574270	2009-04-30	12.08%	21.15%	1.3634	-	0.44	0.4	4.35	0.32	1.1944	1.1929	0.7351	1.1981	0.5451	6.4%	-	55	87
2009-03-24	2009	2	1.94	1.13	-	7.29%	16.13%	274090	592582	34949	78838	27250	60312	0.0301	0.0665	857795	483851	-	373944	43338	68147	13510	226640	24809	11299	215341	906683	906683	1088019	2009-01-31	12.75%	22.03%	1.397	-	0.41	0.37	3.24	0.27	1.133	1.131	0.6038	1.2939	0.5641	4.5%	-	65	103
2008-12-15	2009	1	1.51	0.97	-	9.60%	9.60%	318492	318492	43889	43889	33062	33062	0.0365	0.0365	870952	526630	-	344322	15288	27913	574	226640	12625	13199	213441	906683	906683	1196821	2008-10-31	13.78%	24.67%	1.4647	-	0.38	0.34	3.88	0.28	1.1432	1.1416	0.5707	1.5295	0.6047	5.0%	-	73	111
2008-09-23	2008	4	1.61	1.05	0.0050	7.51%	27.34%	307650	1452162	31212	121125	23389	85110	0.0258	0.0945	870632	559372	-	311260	178512	115369	36611	126886	63143	99754	226640	906683	901044	1314690	2008-07-31	10.15%	25.14%	1.6679	15.3509	0.35	0.31	4.68	0.29	1.1177	1.116	0.5444	1.7971	0.6425	3.9%	-	68	106
2008-06-25	2008	3	1.97	1.22	-	7.67%	21.49%	298121	1144512	29964	89913	22024	61721	0.0243	0.0686	801519	514291	24	287228	130324	102681	46865	101886	27643	74508	176394	906683	899762	1650163	2008-04-30	10.05%	26.55%	1.8243	-	0.32	0.26	7.0	0.26	1.1526	1.1506	0.5307	1.7907	0.6416	4.6%	-	68	93
2008-03-24	2008	2	2.16	1.47	-	8.17%	14.97%	351408	846391	32605	59949	21676	39697	0.0243	0.0445	795805	530585	40	265220	129937	97198	51986	101886	32739	84725	186611	891842	891671	1400191	2008-01-31	9.28%	33.52%	1.751	-	0.3	0.24	6.54	0.27	1.0759	1.0739	0.5431	2.0008	0.6667	2.5%	-	63	101
2007-12-18	2008	1	2.56	1.2	-	7.57%	7.57%	494983	494983	27344	27344	18021	18021	0.0200	0.0200	684163	445996	-	238167	52267	4169	38257	126886	48098	9841	136727	899697	899697	2105290	2008-10-31	5.52%	34.10%	1.8231	-	0.26	0.24	9.75	0.21	1.2448	1.2448	0.4956	1.8726	0.6519	7.5%	-	84	115
2007-09-27	2007	4	2.72	2.26	-	8.62%	25.99%	317722	824283	28099	77918	18968	57160	0.0211	0.0681	582824	362888	-	219936	88510	16837	9462	6001	105347	95885	101886	899237	839145	2616779	2007-07-31	8.84%	32.50%	1.2908	42.7206	0.26	0.23	12.65	0.18	1.2725	1.2725	0.5534	1.65	0.6226	10.7%	-	103	136
2007-06-25	2007	3	N/A	N/A	-	8.91%	19.00%	229327	506561	23837	49819	17912	38192	0.0199	0.0470	512925	311957	-	200968	37806	33535	90026	6001	4271	94297	100298	898250	813367	1922255	2007-04-30	10.39%	24.86%	0.8472	-	0.25	0.25	8.56	0.15	1.4081	1.4081	0.5324	1.5523	0.6082	23.4%	-	183	181
2007-03-26	2007	2	N/A	N/A	-	8.28%	11.04%	205247	277234	19195	25982	15222	20280	0.0189	0.0268	542401	358671	-	183730	42385	23638	124614	6001	66023	58591	64592	805052	755323	1151224	2007-01-31	9.35%	20.70%	N/A	-	0.24	0.24	5.96	0.11	1.2771	1.2771	0.2876	1.9522	0.6613	N/A	-	N/A	N/A

Financial Quarter Balance Sheet

year	qrt	Deferred tax assets (A-0)	Goodwill on consolidation (A-0)	Investment in associated companies (A-0)	Investment in jointly controlled entity (A-0)	Other investments (A-0)	Preference shares (A-0)	Property, plant and equipment (A-0)	Cash and cash equivalents (A-1)	Current asset classified as held for sales (A-1)	Current tax assets (A-1)	Inventories (A-1)	Other receivables, deposits and prepayments (A-1)	Deferred tax liabilities (L-0)	Loans & borrowings (L-0)	Current tax liabilities (L-1)	Loans & borrowings (L-1)	Payables and accruals (L-1)	Minority interest (M-1)
2011	3	74	38235	2028	2	1	1352	1183151	809504	-	550	18655	327708	30209	353203	3863	254008	443394	1863
2011	2	74	38235	2076	2	1	1352	1078609	316641	-	3107	25425	319324	27359	171360	8614	240206	475507	1863
2011	1	45	37335	1962	1	1	1352	1046344	225064	3773	4991	25965	265457	26720	41456	8810	287718	438521	1863
2010	4	74	37335	53857	4	1	1352	485891	222390	3773	5763	27311	537345	26414	43033	4736	182843	362685	1895
2010	3	-	36516	56523	6	1	-	450877	399694	-	7926	29400	227928	25488	50312	5976	172131	245330	1300
2010	2	-	39556	57285	-	20	-	365317	577833	-	800	31368	262774	25412	141756	5132	103384	379307	1300
2010	1	-	39556	56248	-	20	-	362671	381911	-	485	28266	235114	25005	143005	4290	145609	324126	1300
2009	4	-	36166	56222	-	68	-	309171	253893	-	1254	28293	259874	24847	155988	2247	56780	276162	-
2009	3	-	36166	58163	-	67	-	308854	289180	-	-	586	180123	23856	58647	1258	147136	245018	-
2009	2	-	36166	61775	-	67	-	302808	243526	-	-	810	212643	23174	57347	7157	102346	293827	-
2009	1	-	36166	45638	-	67	-	281580	253339	-	-	710	253452	22760	59955	4706	97367	341842	-
2008	4	-	36166	28394	-	68	-	273233	259523	-	628	817	271803	22793	59904	2531	90977	383167	-
2008	3	-	51422	1455	-	20	-	245657	231596	-	-	856	270513	17132	60781	8940	86090	341348	24
2008	2	-	51247	18549	-	20	-	241486	244555	-	-	909	239039	16640	63634	3725	91100	355486	40
2008	1	-	24239	1297	-	-	-	183823	189036	-	84	-	285684	14742	49828	275	20887	360264	-
2007	4	-	24239	1236	-	-	-	181390	163503	-	753	-	211703	14607	52833	727	40447	254274	-
2007	3	-	770	1119	-	55	-	160761	132423	-	-	-	217797	8277	54969	661	55793	192257	-
2007	2	-	770	1073	-	55	-	152485	87383	-	-	-	300635	8303	46530	898	88812	214128	-

Financial Quarter Income Statement

year	qrt	Revenue	Income tax expense	Cost of sales	Finance/interest costs	Other income	Administrative/Operating expenses	Minority interest	Finance/interest income	Share of profit/ (loss) of associates	Depreciation & amortisation	After tax effect of interest savings	Share of net profit of jointly controlled entity
2011	3	377828	13349	287090	6017	11470	22246	-	2492	131	6533	-	0
2011	2	352494	11382	271485	4759	6391	15443	-	908	73	6045	-	1
2011	1	336959	15737	242678	3954	5833	23431	-	651	46	5237	-	3
2010	4	278184	9665	207150	1901	811	13983	93	1161	1010	4875	-	2
2010	3	280373	5355	224658	3819	4389	16735	0	1638	21	4633	-	2
2010	2	250138	9432	194855	3163	4306	11867	0	1337	246	4413	742	-
2010	1	281003	11112	223778	2592	2162	11624	93	1017	61	4282	-	-
2009	4	258091	8663	200672	3740	1880	13309	-	992	145	4184	-	-
2009	3	290170	7414	245587	2290	4781	8870	-	944	96	4190	-	-
2009	2	274090	7699	222702	2287	1009	12305	-	1121	95	4072	-	-
2009	1	318492	10827	263660	2125	714	7214	-	1015	85	3418	-	-
2008	4	307650	7847	264020	2248	389	7280	24	1655	151	5085	-	-
2008	3	298121	7956	259637	2088	3684	8519	16	1198	43	2838	-	-
2008	2	351408	10929	310331	1651	912	6711	-	1423	67	2512	-	-
2008	1	494983	9323	459013	1246	407	6116	-	816	61	2548	-	-
2007	4	317722	9131	289639	1537	8730	6762	-	1430	86	1931	-	-
2007	3	229327	5925	196755	1663	625	6113	-	111	37	1732	-	-
2007	2	205247	3973	178382	1367	582	5384	-	49	86	1636	-	-

Financial Quarter Segments Revenue

year	qrt	Elimination/Adjustment	Investment holding	EPCIC, marine engineering, design engineering & project management	Offshore drilling & provision of marine transportation & support services including hook-up & commissioning	Development and production of petroleum resources
2011	3	57229	2625	355364	77068	-
2011	2	86781	2625	339870	96780	-
2011	1	50214	2625	291427	93121	-

Financial Quarter Segments Profit

year	qrt	Elimination/Adjustment	Investment holding	EPCIC, marine engineering, design engineering & project management	Offshore drilling & provision of marine transportation & support services including hook-up & commissioning	Development and production of petroleum resources
2011	3	1515	687	41681	16999	54
2011	2	381	2945	35681	18252	-
2011	1	1114	1682	35954	16971	-

Short form reference
a_date = announcement date, yr = financial year end, qrt = quarter
h_price = stock highest price during the quarter, l_price = stock lowest price during the quarter
div = dividend recommend or declare in the quarter, roe = return on equity
c_roe = cumulative of return on equity during the financial year
rev = revenue in the current quarter, c_rev = cumulative of revenue during the financial year
pbt = profit before tax in the current quarter, c_pbt = cumulative of profit before tax during the financial year
eps = earnings per share in the current quarter, c_eps = cumulative of earnings per share during the financial year
asset = total asset, liab = total liability, mino = minority interest, equi = total equity
cfo = net cash flow from operating activities, cfi = net cash flow from investing activities
cff = net cash flow from financing activities, cash = cash and cash equivalents as at beginning of financial year
final = cash and cash equivalents as at current financial period ended
share = diluted/basic weighted average number of ordinary shares
c_share = cumulative of diluted/basic weighted average number of ordinary shares during the financial year
m_cap = market capital at announcement date of quarterly report, date = current financial period ended date
prof_m = profit margin, vat = income tax rate, pe = price earning per share ratio of recent four quarter
navps = net asset value per share, ntaps = net tangible asset per share, cps = cash per share
l_cur = liquidity current ratio, l_qui = liquidity quick ratio, l_cash = liquidity cash ratio
g_de = gearing debt to equity ratio, g_da = gearing debt to assets ratio
avg_w = working capital per thousand Ringgit sale
inv_d = days to sell the inventory, rec_d = days to collect the receivables
pay_d = days to pay the payables

CURRENT

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