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Sunday, June 5, 2011

KLCI Stock - NOTION / 0083 - 2011 Quarter 2

Company Info
Market Capital (Capital Size)332,306,962 (Small)
Par ValueRM 0.50

My Analysis
Forecast P/E now(2.15-0.06)/0.24 = 8.71 (Moderate)
Target Price2.40+0.045 = 2.46 (PE 10.0, EPS 0.24, DPS 0.06)
DecisionNot interested unless revenue and profit increase more
Comment
Revenue decreased 10.1% and also lower than preceding year corresponding quarter 4.9%, eps decreased 20.3% and also lower than preceding year corresponding quarter 13%, cash generated from operating not enough to cover financing & investing activities hence still generate cash from financing activities, stronger liquidity at moderate level now, lower gearing ratio at moderate level now, working capital increasing, all accounting periods are good, affecting by weakening USD but got USD and EURO currency hedging to stabilize the effect of a strong ringgit, impacted by the Sendai earthquake
First Support Price2.0
Second Support Price1.75
Risk RatingMODERATE

Research House
HwangDBS Target Price2.5 (2011-01-24)
ECM Target Price2.5 (2011-03-21)
Maybank Target Price2.4 (2011-03-24)
RHB Target Price2.25 (2011-04-12)
HLG Target Price2.58 (2011-05-11)
OSK Target Price2.12 (2011-05-11)

Accounting Ratio
Return on Equity14.40%
Dividend Yield3.49%
Profit Margin22.42%
Tax Rate10.47%
Asset Turnover0.5895
Net Asset Value Per Share1.62
Net Tangible Asset per share1.62
Price/Net Tangible Asset Per Share1.28
Cash Per Share0.19
Liquidity Current Ratio2.6317
Liquidity Quick Ratio1.8283
Liquidity Cash Ratio0.5854
Gearing Debt to Equity Ratio0.5388
Gearing Debt to Asset Ratio0.3491
Working capital per thousand Ringgit sale35.8%
Days to sell the inventory74
Days to collect the receivables82
Days to pay the payables35

My notes based on 2011 quarter 2 report (number in '000):-
- The lower PAT is mainly attributable to the lower revenue from camera segment

- In Q2FY2011, HDD parts revenue recorded RM20.5 million (Q1FY2011: RM20.8 million), camera parts recorded RM24.4 million (Q1FY2011: RM29.9 million) whilst the industrial/automotive revenue was at RM9.0 million (Q1FY2011: RM9.3 million). The product mix for Q2FY2011 was HDD:Camera:Industrial/Automotive of 38%:45%:17% compared to previous quarter's mix of 35%:50%:15%

- Estimate next 4Q eps after 2011 Q2 result announced = 0.24, estimate PE on current price 2.15 = 8.71(DPS 0.06)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.06*4 = 0.24, estimate highest/lowest PE = 9.6/6.81 (DPS 0.045)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0523*4*0.9 = 0.1883, estimate highest/lowest PE = 11.44/8.2 (DPS 0.045)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0192*3+0.0806 = 0.1382(It may take 3Q to apply corrective measures to control costs, minimise rejects and maximise its production capacity), estimate highest/lowest PE = 15.16/10.67 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.3788 (0.1804*2 = 0.3608, 5% grow from 0.3608), estimate highest/lowest PE = 8.65/5.24 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.3674, estimate highest/lowest PE = 9.44/7.57 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0185*4 = 0.074, estimate highest/lowest PE = 11.62/9.95 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0158*4 = 0.0632, estimate highest/lowest PE = 8.39/5.49 (DPS 0.01)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0065*4 = 0.026, estimate highest/lowest PE = 13.46/9.23 (DPS 0.01)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0103*4 = 0.0412, estimate highest/lowest PE = 6.8/3.64 (DPS 0.01)

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