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Friday, September 16, 2011

KLCI Stock - PCHEM / 5183 - 2011 Quarter 5

Company Info
Market Capital (Capital Size)49,280,000,000 (Very Large)
Par ValueRM 0.10

My Analysis
Forecast P/E now(6.16-0.19)/0.3745 = 15.94 (Moderate)
Target Price5.99+0.19 = 6.18 (PE 16.0, EPS 0.3745, DPS 0.19)
DecisionNot interested unless stock price sustain above 6.4
Revenue decreased 23.2% but higher than preceding year corresponding quarter 5.8%, eps decreased 20.9% but higher than preceding year corresponding quarter 8%, cash generated from operating more than enough to cover all expenses, stronger liquidity ratio at very strong level now, lower gearing ratio at below moderate level now, all accounting ratio are good, affecting by plant maintenance activities
First Support Price6.0
Second Support Price5.5

Research House
JP Morgan Target Price7.8 (2011-03-09)
Credit Suisse Target Price8.5 (2011-04-05)
OSK Target Price9.28 (2011-05-30)
AMMB Target Price8.43 (2011-06-01)
MIDF Target Price6.82 (2011-08-08)
CIMB Target Price9.7 (2011-08-24)
Maybank Target Price8.15 (2011-08-29)
RHB Target Price6.37 (2011-08-29)

Accounting Ratio
Return on Equity3.39%
Dividend Yield3.08%
Profit Margin31.63%
Tax Rate23.06%
Asset Turnover0.5031
Net Asset Value Per Share2.54
Net Tangible Asset per share2.28
Price/Net Tangible Asset Per Share2.64
Cash Per Share1.24
Liquidity Current Ratio5.7333
Liquidity Quick Ratio5.1549
Liquidity Cash Ratio4.4239
Gearing Debt to Equity Ratio0.3743
Gearing Debt to Asset Ratio0.259
Working capital per thousand Ringgit sale72.0%
Days to sell the inventory44
Days to collect the receivables37
Days to pay the payables58

My notes based on 2011 quarter 5 report (number in '000):-
- Higher revenue than FY11Q1 was primarily driven by strong prices seen across most petrochemical products, partially offset by a stronger Ringgit Malaysia against US Dollar

- During the quarter, there was methane gas supply limitation for the Fertiliser and Methanol segment. This affected the production of fertiliser, methanol and ammonia. The gas supply constraint, however, did not affect the availability of ethane and propane for Olefins and Derivatives segment, which continues to be the key contributor to the Group’s results

- In addition, there was significant level of maintenance activities, which combined with the gas supply limitations, led to lower plant utilisation and reduced production volume for the quarter

- Higher pbt than FY11Q1 due to higher product prices and lower feedstock costs

- Lower revenue than FY11Q4 mainly due to significant level of maintenance activities and methane gas supply limitations

- Lower share of profits from associates and jointly controlled entities due to higher average effective tax rates of our associates

- Higher tax expense due to a once-off recognition of deferred tax assets in the preceding quarter

- Estimate next 4Q eps after 2011 Q5 result announced = (0.0921+0.105)*2*0.95 = 0.3745, estimate PE on current price 6.16 = 15.94(DPS 0.19)
- Estimate next 4Q eps after 2011 Q4 result announced = 0.1165*4 = 0.466, estimate highest/lowest PE = 15.15/12.45 (DPS 0.19)

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

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