KLCI Stock - GENTING / 3182 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	31,984,710,149 (Very Large)
Par Value	RM 0.10

My Analysis

Forecast P/E now	(8.61-0.08)/0.6167 = 13.83 (Moderate)
Target Price	9.87+0.08 = 9.95 (PE 16.0, EPS 0.6167, DPS 0.08)
Decision	Not interested unless stock price can sustain at next uptrend if got
Comment	Revenue decreased 8.7% but higher than preceding year corresponding quarter 9.2%, eps decreased 18.3% and also lower than preceding year corresponding quarter 8.9%, cash generated from operating not enough to cover financing expenses hence still increased borrowings to cover other expenses, slightly weaker liquidity ratio at high level now, higher gearing ratio at high level now, payables ratio got slightly high, CPO price if can support above 3000 then will rebound
First Support Price	8.5
Second Support Price	8.0
Risk Rating	MODERATE

Research House

Credit Suisse Target Price	13.5 (2011-01-13)
TA Target Price	13.26 (2011-02-18)
HwangDBS Target Price	14.3 (2011-02-24)
Macquarie Target Price	11.6 (2011-04-06)
AMMB Target Price	13.7 (2011-05-09)
CIMB Target Price	15.4 (2011-05-27)
UOB Target Price	13.63 (2011-06-13)
RHB Target Price	13.3 (2011-07-07)
ECM Target Price	9.83 (2011-08-26)
Maybank Target Price	10.2 (2011-08-26)

Accounting Ratio

Return on Equity	9.04%
Dividend Yield	0.93%
Profit Margin	34.64%
Tax Rate	22.69%
Asset Turnover	0.3341
Net Asset Value Per Share	4.53
Net Tangible Asset per share	3.19
Price/Net Tangible Asset Per Share	3.07
Cash Per Share	4.49
Liquidity Current Ratio	3.0969
Liquidity Quick Ratio	3.0162
Liquidity Cash Ratio	2.5474
Gearing Debt to Equity Ratio	1.2118
Gearing Debt to Asset Ratio	0.3921
Working capital per thousand Ringgit sale	79.0%
Days to sell the inventory	17
Days to collect the receivables	63
Days to pay the payables	127

My notes based on 2011 quarter 2 report (number in '000):-
- The decrease in revenue and pbt in the Leisure & Hospitality Division was attributed mainly to the unfavourable win percentage in the premium players business of the Singapore Integrated Resort

- Revenue and pbt from the leisure and hospitality business in Malaysia increased in the current quarter due to higher hold percentage in the premium players business

- Higher revenue and higher adjusted EBITDA from the Power Division was mainly due to higher dispatch by the Meizhou Wan power plant as well as the higher tariff rate for 2011

- The increase in the Plantation Division’s revenue and adjusted EBITDA in the current quarter was principally due to higher palm products prices and higher FFB production

- The share of results in jointly controlled entities and associates increased in the current quarter mainly due to the higher profits generated by the Indian power plants

- Higher pbt included:
i) gain on disposal of available-for-sale financial assets by GENS of RM112.3 million
ii) construction profit of RM15.0 million generated from the progressive development of the facility at Resorts World New York
iii) property related termination costs of RM39.4 million incurred on the purchase of the properties in the City of Miami, Florida, United States of America

- The UK casinos reported a loss in the current quarter compared with an adjusted EBITDA in the preceding quarter due to lower hold percentage despite the increase in the business volume in the current quarter

- The lower adjusted EBITDA from the Power Division was due to the lower dispatch in the current quarter by the Meizhou Wan power plant. In addition, the preceding quarter’s adjusted EBITDA had included the compensation from the Fujian provincial government in respect of an increase in tariff rate for the Meizhou Wan power plant

- Estimate next 4Q eps after 2010 Q2 result announced = 0.1713*0.9*4 = 0.6167(exclude RM116.7 million one time gain), estimate PE on current price 8.61 = 13.83(DPS 0.08)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.7531*1.1 = 0.8284, estimate highest/lowest PE = 13.67/11.25 (DPS 0.078)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.14*4*1.05 = 0.588, estimate highest/lowest PE = 19.91/16.59 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0945*4 = 0.3781, estimate highest/lowest PE = 31.49/26.22 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1985*4 = 0.794, estimate highest/lowest PE = 13.53/11.22 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.2813*1.15 = 0.3235(15% increased), estimate highest/lowest PE = 21.54/2 (DPS 0.072)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0661*4 = 0.2644, estimate highest/lowest PE = 26.77/23.18 (DPS 0.072)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0999*4 = 0.3996, estimate highest/lowest PE = 19.09/15.62 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0577*4 = 0.2308, estimate highest/lowest PE = 33.23/27.64 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0574*4 = 0.2296, estimate highest/lowest PE = 28.88/23 (DPS 0.07)

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