KLCI Stock - TONGHER / 5010 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	244,665,600 (Small)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(1.92-0.08)/0.3 = 6.13 (Moderate)
Target Price	2.40+0.08 = 2.48 (PE 8.0, EPS 0.3, DPS 0.08)
Decision	Not interested unless stock price can sustain above 2
Comment	Revenue increased 15.5% and is eighth consecutive quarter increasing(higher than preceding year corresponding quarter 160.5%), eps decreased 12% but higher than preceding year corresponding quarter 80.7%, no cash generate from operating activities but cash from financing more than enough to cover all expenses, weaker liquidity ratio but still at moderate level now, higher gearing ratio at moderate now, inventory ratio got slightly high
First Support Price	1.9
Second Support Price	1.75
Risk Rating	MODERATE

Research House

OSK Target Price	2.4 (2011-08-22)
Affin Target Price	2.85 (2011-09-07)

Accounting Ratio

Return on Equity	10.49%
Dividend Yield	4.17%
Profit Margin	11.03%
Tax Rate	16.65%
Asset Turnover	0.9741
Net Asset Value Per Share	2.41
Net Tangible Asset per share	2.41
Price/Net Tangible Asset Per Share	0.8
Cash Per Share	0.76
Liquidity Current Ratio	2.3025
Liquidity Quick Ratio	1.1225
Liquidity Cash Ratio	0.5859
Gearing Debt to Equity Ratio	0.5559
Gearing Debt to Asset Ratio	0.3058
Working capital per thousand Ringgit sale	39.4%
Days to sell the inventory	148
Days to collect the receivables	57
Days to pay the payables	10

My notes based on 2011 Quarter 2 report (number in '000):-
- Higher revenue due to higher sales demand especially from the stainless steel fasteners segment

- Estimate next 4Q eps after 2011 Q2 result announced = 0.075*4 = 0.3(exclude RM1.8m other income), estimate PE on current price 1.92 = 6.13(DPS 0.08)
- Estimate next 4Q eps after 2011 Q1 result announced = (0.1043+0.0543)*2 = 0.3172, estimate highest/lowest PE = 8.23/5.67 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0375*4 = 0.15(0.0375 is average eps of recent 2 quarter exclude non-repeatable profit RM 5.1 million), estimate highest/lowest PE = 18.93/12.33 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.154*1.1 = 0.1694(0.154 is recent 4Q cum_eps), estimate highest/lowest PE = 11.22/9.92 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0347(average of recent 3Q)*4 = 0.1388, estimate highest/lowest PE = 13.54/11.53 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0469*4 = 0.1876, estimate highest/lowest PE = 10.61/8.8 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0278*4 = 0.1112, estimate highest/lowest PE = 16.19/14.39 (DPS 0.05)

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