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Wednesday, June 29, 2011

KLCI Stock - KFC / 3492 - 2011 Quarter 1

Company Info
Market Capital (Capital Size)3,054,072,036 (Large)
Par ValueRM 0.50

My Analysis
Forecast P/E now(3.85-0.155)/0.2336 = 15.82 (Moderate)
Target Price3.74+0.155 = 3.89 (PE 16.0, EPS 0.2336, DPS 0.155)
DecisionNot buy unless price below 3.7
Revenue decreased 5.8% but higher than preceding year corresponding quarter 7.2%, eps decreased 25.9% but higher than preceding year corresponding quarter 4.6%, cash generated from operating enough to cover financing expenses but remaining not enough for investing expenses, null
First Support Price3.85
Second Support Price3.7

Research House
BIMB Target Price4.3 (2011-02-22)
Maybank Target Price3.97 (2011-02-22)
AMMB Target Price4.15 (2011-03-03)
RHB Target Price3.74 (2011-04-27)
OSK Target Price4.15 (2011-05-25)
MIDF Target Price4.12 (2011-06-14)

Accounting Ratio
Return on Equity16.96%
Dividend Yield4.03%
Profit Margin8.17%
Tax Rate30.01%
Asset Turnover1.5956
Net Asset Value Per Share1.24
Net Tangible Asset per share1.15
Price/Net Tangible Asset Per Share3.35
Cash Per Share0.12
Liquidity Current Ratio1.1433
Liquidity Quick Ratio0.6231
Liquidity Cash Ratio0.2218
Gearing Debt to Equity Ratio0.6006
Gearing Debt to Asset Ratio0.3715
Working capital per thousand Ringgit sale2.4%
Days to sell the inventory34
Days to collect the receivables24
Days to pay the payables59

My notes based on 2011 quarter 1 report (number in '000):-
- The Group’s revenue for the period under review improved primarily from its continuing strategy of network expansion and its effective KFC marketing programs. The growth in the integrated poultry segment was attributed to better sales to the restaurants and retail outlets and the continuing improvement in its local open market sales and export sales

- Malaysia KFC restaurants revenue and profit growth were due to :-
i) continuing network expansion where 8 new KFC restaurants were opened during the period under review
ii) introduction of innovative new products and promotions such as the 500th restaurant celebration Combo, KFC Fish Donut and KFC Lunch Treats

- Foreign KFC restaurants lower profitability attributed to :-
i) Singapore operations introduction of new products such as the Fortune Feast, KFC Mandarin Orange egg tarts during the festive season and value products such as KFC Snacker and Hearty Deal drove sales and transactions at the restaurants. However its profitability was dampened by the increased operating costs
ii) India outlets registered encouraging sales but its profitability was hampered by initial start-up costs

- Integrated Poultry division registered improved sales to the KFC restaurants and better sales of its Ayamas products to the local open market and export market, its profitability was negatively affected by its Rasamas restaurants performance

- Estimate next 4Q eps after 2011 Q1 result announced = (0.061+0.0452)*2*1.1 = 0.2336, estimate PE on current price 3.85 = 15.82(DPS 0.155)

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