KLCI Stock - ARMADA / 5210 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	10,454,607,912 (Very Large)
Par Value	RM 0.20

My Analysis

Forecast P/E now	3.57/0.1214 = 29.41 (High)
Target Price	0.1214*20.0 = 2.43 (PE 20.0, EPS 0.1214)
Decision	Not interested unless stock price sustain above 3.7
Comment	Revenue higher than preceding year corresponding quarter 40.9%, eps lower than preceding year corresponding quarter 28.1%, cash generated from operating not enough to cover financing expenses hence got generated more cash from financing activities to cover other expenses, slightly higher liquidity ratio at weak level now, lower gearing ratio but still at high level now, benefit from vessel utilisation increase, USD620 million Balnaves FPSO project
First Support Price	3.35
Second Support Price	3.2
Risk Rating	MODERATE

Research House

Kenanga Target Price	3.88 (2011-07-21)
ECM Target Price	3.91 (2011-08-26)
Credit Suisse Target Price	4.4 (2011-09-09)

Accounting Ratio

Return on Equity	%
Dividend Yield	-
Profit Margin	19.25%
Tax Rate	19.33%
Asset Turnover	N/A
Net Asset Value Per Share	0.59
Net Tangible Asset per share	0.59
Price/Net Tangible Asset Per Share	6.44
Cash Per Share	0.14
Liquidity Current Ratio	0.4447
Liquidity Quick Ratio	0.4428
Liquidity Cash Ratio	0.1447
Gearing Debt to Equity Ratio	3.0018
Gearing Debt to Asset Ratio	0.7486
Working capital per thousand Ringgit sale	N/A
Days to sell the inventory	-
Days to collect the receivables	-
Days to pay the payables	-

My notes based on 2011 quarter 2 report (number in '000):-
- Higher revenue than FY10 primarily driven by its:
i) new OFS segment currently comprising the ongoing conversion and sale of an FSO to Petrofac of RM158.0 million
ii) higher utilisation from its DLB, Armada Installer in Turkmenistan of RM104 million which commenced operation in May 2010

- Lower EBITDA margin than FY10 mainly due to the ongoing conversion and sale of an FSO for the Sepat project recognised in the new OFS segment and fair value charge of a call option granted to an Executive Director amounting to RM6.2 million, which was expensed off

- Higher revenue than FY11Q1 primarily driven by the increase in our OSV fleet utilisation at 83%;78%, as a result of new charter hire and renewal of existing charter hire contracts on some of our vessels

- Lower pbt than FY11Q1 mainly due to:
i) higher vessel operating cost in line with higher OSV segment which includes the relocation cost of vessels deployed to Nigeria of RM6.0 million
ii) fair value charge of a call option granted to an Executive Director amounting to RM6.2 million, which was expensed off
iii) higher finance cost of RM6.0 million mainly arising from a charge due to fair value changes on derivative financial instruments compared to a fair value gain of RM7.5 million in the first quarter
iv) additional depreciation charges mainly for Griffin Venture

- At end of June 2011, the utilisation of the Group’s vessels reached 83%

- Estimate next 4Q eps after 2011 Q2 result announced = 0.0264*4*1.15 = 0.1214, estimate PE on current price 3.57 = 29.41

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