KLCI Stock - MPHB / 3859 - 2011 Quarter 1

Company Info

Market Capital (Capital Size)	4,327,623,448 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(3.01-0.1)/0.656 = 4.44 (Moderate)
Target Price	6.56+0.1 = 6.66 (PE 10.0, EPS 0.656, DPS 0.1)
Decision	BUY
Comment	Revenue increased 4.8% and is second consecutive quarter increasing and but lower than preceding year corresponding quarter 4.8%, eps increased 1% and is third consecutive quarter increasing and also higher than preceding year corresponding quarter 31.1%, cash generated from operating more than enough to cover all expenses, weaker liquidity ratio but still at high level now, lower gearing ratio at high level now, all accounting periods are good, acquiring 49% remaining shares
First Support Price	3.0
Second Support Price	2.75
Risk Rating	MODERATE

Accounting Ratio

Return on Equity	11.21%
Dividend Yield	3.32%
Profit Margin	17.72%
Tax Rate	18.92%
Asset Turnover	0.5631
Net Asset Value Per Share	2.3
Net Tangible Asset per share	-0.41
Price/Net Tangible Asset Per Share	-7.63
Cash Per Share	0.7
Liquidity Current Ratio	3.0017
Liquidity Quick Ratio	2.1507
Liquidity Cash Ratio	1.2381
Gearing Debt to Equity Ratio	1.3329
Gearing Debt to Asset Ratio	0.517
Working capital per thousand Ringgit sale	34.1%
Days to sell the inventory	64
Days to collect the receivables	45
Days to pay the payables	71

My notes based on 2011 quarter 1 report (number in '000):-
- Higher pbt mainly due to the better performance of the Gaming and Stockbroking Division

- Higher pbt from Gaming Division mainly due to lower payout ratio, increase in the number of draws and reduced finance cost

- Higher pbt from Financial Services Division mainly due to the better underwriting results, higher interest income from loan financing activities as well as fair value gain on assets

- Higher pbt from Stockbroking Division mainly due to the recovery of bad debts and the write back of specific provision for doubtful debts of the margin accounts

- Estimate next 4Q eps after 2010 Q4 result announced = 0.164*4 = 0.656(eps after acquire 49% remaining Magnum), estimate PE on current price 3.01 = 4.44(DPS 0.1)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.282, estimate highest/lowest PE = 11.24/8.26 (DPS 0.1)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1368*2 = 0.2736, estimate highest/lowest PE = 9.76/7.38 (DPS 0.1)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0563*4*0.95 = 0.2139, estimate highest/lowest PE = 10.52/9.35 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.22*1.05 = 0.231 (5% grow adjustment from 0.22 due to positive result), estimate highest/lowest PE = 9.39/7.84 (DPS 0.09)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.05*4 = 0.2*1.1 = 0.22 (10% grow from 0.2, due to 4D Jackpot game and current economic environment, result exclude other income), estimate highest/lowest PE = 11.05/8.27 (DPS 0.1, correction to last quarter estimated)

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