KLCI Stock - LPI / 8621 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	3,054,270,924 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(13.8-0.7)/0.6678 = 19.62 (High)
Target Price	10.68+0.7 = 11.38 (PE 16.0, EPS 0.6678, DPS 0.7)
Decision	Not interested unless revenue and profit increase more (especially from general insurance division)
Comment	Revenue increased 0.2% and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 23%, eps decreased 18.7% and also lower than preceding year corresponding quarter 25.8%, cash generated from operating just enough to cover all expenses, general insurance revenue and profit increased
First Support Price	13.4
Second Support Price	13.1
Risk Rating	MODERATE

Accounting Ratio

Return on Equity	12.58%
Dividend Yield	5.07%
Profit Margin	19.62%
Tax Rate	25.14%
Asset Turnover	0.3471
Net Asset Value Per Share	5.21
Net Tangible Asset per share	5.21
Price/Net Tangible Asset Per Share	2.65
Cash Per Share	2.75
Liquidity Current Ratio	5.1175
Liquidity Quick Ratio	3.545
Liquidity Cash Ratio	2.279
Gearing Debt to Equity Ratio	1.0959
Gearing Debt to Asset Ratio	0.5229
Working capital per thousand Ringgit sale	131.1%
Days to sell the inventory	399
Days to collect the receivables	136
Days to pay the payables	109

My notes based on 2011 quarter 2 report (number in '000):-
- The increase of revenue mainly due to higher gross premium underwritten

- The increase of profit than preceding year corresponding quarter mainly due to higher underwriting profit

- The decrease in the profit before tax for the said quarter was mainly due to higher investment income received in the preceding quarter

- Estimate next 4Q eps after 2010 Q2 result announced = (0.1754+0.1426)*2*1.05 = 0.6678, estimate PE on current price 13.8 = 19.62(DPS 0.7)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.1754*4*1.1 = 0.7718, estimate highest/lowest PE = 17.19/16.65 (DPS 0.55)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.6383*1.1 = 0.7021, estimate highest/lowest PE = 19.27/17.73 (DPS 0.55)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1685*4*1.05 = 0.7077, estimate highest/lowest PE = 19.57/15.42 (DPS 0.37)
- Estimate next 4Q eps after 2010 Q2 result announced = 1.0303(10% grow from 0.9366), estimate highest/lowest PE = 17.46/15.5 (DPS 0.5125)
- Estimate next 4Q eps after 2010 Q1 result announced = 1.0303(10% grow from 0.9366), estimate highest/lowest PE = 15.15/12.76 (DPS 0.675)
- Estimate next 4Q eps after 2009 Q4 result announced = 1.0533(15% grow from 0.9159), estimate highest/lowest PE = 12.94/11.53 (DPS 0.675)
- Estimate next 4Q eps after 2009 Q3 result announced = 1.0253, estimate highest/lowest PE = 13.23/11.16 (DPS 0.74)
- Estimate next 4Q eps after 2009 Q2 result announced = 1.0204, estimate highest/lowest PE = 11.43/10.25 (DPS 0.74)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.979, estimate highest/lowest PE = 10.88/8.63 (DPS 0.85)

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