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Friday, June 17, 2011

KLCI Stock - TOPGLOV / 7113 - 2011 Quarter 3

Company Info
Market Capital (Capital Size)3,253,122,544 (Large)
Par ValueRM 0.50

My Analysis
Forecast P/E now(5.26-0.1)/0.2256 = 22.87 (High)
Target Price3.38+0.1 = 3.48 (PE 15.0, EPS 0.2256, DPS 0.1)
DecisionNot interested unless latex price and USD dollor recover to higher profit level
Revenue increased 10.3% but lower than preceding year corresponding quarter 3.7%, eps increased 0.7% but lower than preceding year corresponding quarter 61.1%, cash generated from operating after deduct operating expenses then not enough to cover dividend and in addition spent large expenses in investing activities, weaker liquidity ratio at high level now, higher gearing ratio at below moderate level now, all accounting ratio are good, latex price decreasing, USD against MYR slowly strengthening since end of May
First Support Price5.0
Second Support Price4.75

Research House
Maybank Target Price5.1 (2011-03-30)
RHB Target Price4.09 (2011-05-20)
OSK Target Price6.5 (2011-05-30)
Affin Target Price4.62 (2011-06-09)
AMMB Target Price3.9 (2011-06-14)
HwangDB Target Price5.3 (2011-06-15)
CIMB Target Price4.76 (2011-06-16)
MIDF Target Price5.14 (2011-06-16)

Accounting Ratio
Return on Equity11.77%
Dividend Yield2.66%
Profit Margin6.45%
Tax Rate24.53%
Asset Turnover1.4919
Net Asset Value Per Share1.76
Net Tangible Asset per share1.73
Price/Net Tangible Asset Per Share3.04
Cash Per Share0.35
Liquidity Current Ratio3.3249
Liquidity Quick Ratio2.4713
Liquidity Cash Ratio1.0268
Gearing Debt to Equity Ratio0.2275
Gearing Debt to Asset Ratio0.1821
Working capital per thousand Ringgit sale24.1%
Days to sell the inventory35
Days to collect the receivables51
Days to pay the payables34

My notes based on 2011 Quarter 3 report (number in '000):-
- The decline was mainly due to last year’s exceptionally good result which was boosted by a surge in demand of rubber gloves during the influenza A(H1N1) virus outbreak; and the more favourable latex prices and US Dollar exchange rate at that time. Average latex prices rose by 39% (from RM7.10/kg in 3Q2010 to RM9.85/kg in 3Q2011) while the average US dollar against Ringgit weakened by 7.4% (RM3.26 in 3Q2010 to RM3.02 in 3Q2011). Also, the time lag in the cost pass-through to its customers has contributed to the decline in profit. However, since reaching its peak of RM10.99 per kg on 11 April 2011, latex price has declined by 14% to RM9.44 per kg as at 16 June 2011

- Estimate next 4Q eps after 2011 Q3 result announced = 0.047*4*1.2 = 0.2256, estimate PE on current price 5.26 = 22.87(DPS 0.1)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.08+0.088+0.0968+0.1065 = 0.3713, estimate highest/lowest PE = 15.19/13.74 (DPS 0.23)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.2122*4 = 0.8488*1.1 = 0.9337(10% adjustment), estimate highest/lowest PE = 15.5/10.36 (DPS 0.29)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.235*4 = 0.94, estimate highest/lowest PE = 14.68/11.66 (DPS 0.22)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.217*4 = 0.868, estimate highest/lowest PE = 14.31/10.75 (DPS 0.22)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.191*4 = 0.764, estimate highest/lowest PE = 12.23/10.2 (DPS 0.22)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1424*4 = 0.5696, estimate highest/lowest PE = 14.04/10.8 (DPS 0.15)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.1221*4 = 0.4884, estimate highest/lowest PE = 13.21/9.89 (DPS 0.15)

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