KLCI Stock - PCHEM / 5183 - 2011 Quarter 4

Company Info

Market Capital (Capital Size)	56,160,000,000 (Very Large)
Par Value	RM 0.10

My Analysis

Forecast P/E now	(7.02-0.19)/0.466 = 14.66 (Moderate)
Target Price	7.46+0.19 = 7.65 (PE 16.0, EPS 0.466, DPS 0.19)
Decision	Watching, buy when sell volume is low
Comment	Revenue increased 11.7% and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 8.9%, eps increased 0.2% and is second consecutive quarter increasing but lower than preceding year corresponding quarter 3.5%, cash generated from operating only enough to cover investing activities, expenses of financing activities mainly use the cash generated from financing activities to cover, weaker liquidity ratio but still at strong level now, higher gearing ratio but still at below moderate level now, all accounting ratio are good, oil price decreasing since April
First Support Price	6.96
Second Support Price	6.83
Risk Rating	MODERATE

Research House

JP Morgan Target Price	7.8 (2011-03-09)
CIMB Target Price	10 (2011-03-28)
Credit Suisse Target Price	8.5 (2011-04-05)
MIDF Target Price	6.82 (2011-05-30)
OSK Target Price	9.28 (2011-05-30)
AMMB Target Price	8.43 (2011-06-01)
Maybank Target Price	8.15 (2011-06-14)

Accounting Ratio

Return on Equity	14.22%
Dividend Yield	2.71%
Profit Margin	29.82%
Tax Rate	10.63%
Asset Turnover	0.3948
Net Asset Value Per Share	2.6
Net Tangible Asset per share	2.31
Price/Net Tangible Asset Per Share	3.1
Cash Per Share	1.11
Liquidity Current Ratio	4.2744
Liquidity Quick Ratio	3.8735
Liquidity Cash Ratio	3.0465
Gearing Debt to Equity Ratio	0.4005
Gearing Debt to Asset Ratio	0.272
Working capital per thousand Ringgit sale	83.9%
Days to sell the inventory	50
Days to collect the receivables	73
Days to pay the payables	99

My notes based on 2011 quarter 4 report (number in '000):-
- The increase of revenue was achieved on the back of higher realised prices across most petrochemical products. Overall, the Group’s production volume was lower due to maintenance activities during the current quarter

- Group’s operating profit declined due principally to costs incurred for maintenance activities in the current quarter. The impact of higher cost was however offset by lower tax expense and higher share of profits from associates and jointly controlled entities

- The tax expense for the current quarter was lower by RM221 million, mainly due to recognition of deferred tax assets while our share of profits from associates and jointly controlled entities grew by RM92 million, primarily due to continued strong performance by BASF PETRONAS Chemicals Sdn. Bhd

- Estimate next 4Q eps after 2011 Q4 result announced = 0.1165*4 = 0.466, estimate PE on current price 7.02 = 14.66(DPS 0.19)

- Yearly net eps, 2008 = 0.491, 2009 = 0.352, 2010 = 0.275

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