KLCI Stock - ADVENTA / 7191 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	255,152,235 (Small)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(1.67-0.02)/0.0728 = 22.66 (High)
Target Price	0.73+0.02 = 0.75 (PE 10.0, EPS 0.0728, DPS 0.02)
Decision	Not interested unless stock price sustain above 1.7
Comment	Revenue decreased 0.7% and was second consecutive quarter decreasing but still higher than preceding year corresponding quarter 18.5%, eps decreased 12.3% and also lower than preceding year corresponding quarter 52.2%, no cash generated from operating but cash generated from financing more than enough to cover all expenses, stronger liquidity ratio but still at low level now, higher gearing ratio from above moderate to high level now, all accounting ratio are good, maintaining high inventory can mean demand still strong, benefit from USD strengthening and latex price decreasing
First Support Price	1.54
Second Support Price	1.45
Risk Rating	MODERATE

Research House

CIMB Target Price	1.49 (2011-09-29)
OSK Target Price	2 (2011-09-29)

Accounting Ratio

Return on Equity	10.92%
Dividend Yield	4.19%
Profit Margin	2.90%
Tax Rate	-
Asset Turnover	0.8327
Net Asset Value Per Share	1.47
Net Tangible Asset per share	1.45
Price/Net Tangible Asset Per Share	1.01
Cash Per Share	0.41
Liquidity Current Ratio	1.4406
Liquidity Quick Ratio	0.9523
Liquidity Cash Ratio	0.3985
Gearing Debt to Equity Ratio	1.1576
Gearing Debt to Asset Ratio	0.5356
Working capital per thousand Ringgit sale	17.1%
Days to sell the inventory	72
Days to collect the receivables	79
Days to pay the payables	42

My notes based on 2011 quarter 3 report (number in '000):-
- Lower pbt than FY10Q3 due to weaknesses in USD and higher raw material cost despite achieving cost savings across the Group

- Lower revenue and pbt due to Ringgit contributed to the small drop and earnings are still weak from sustained commodity prices

- Internal growth grew at all subsidiaries except in Uruguay where a severe winter cut off fuel supplies, reducing production output

- Estimate next 4Q eps after 2011 Q3 result announced = 0.013*4*1.4 = 0.0728(exclude RM2 million from tax and other income), estimate PE on current price 1.67 = 22.66(DPS 0.07)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.03*4*1.3 = 0.156, estimate highest/lowest PE = 12.69/8.85 (DPS 0.07)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0265*4*1.3 = 0.1378(slowly recover), estimate highest/lowest PE = 16.91/13.5 (DPS 0.07)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.04*4 = 0.16, estimate highest/lowest PE = 17.38/12.44 (DPS 0.07)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.055*4*0.95 = 0.209, estimate highest/lowest PE = 12.39/8.71 (DPS 0.07)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0434*4 = 0.1736*1.1(QbQ improvement adjustment) = 0.191, estimate highest/lowest PE = 16.81/11.78 (DPS 0.07)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.063*4 = 0.252, estimate highest/lowest PE = 15.36/11.35 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0372*4 = 0.1488, estimate highest/lowest PE = 28.83/18.28 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0319*4 = 0.1276, estimate highest/lowest PE = 23.2/11.36 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0272*4 = 0.1088, estimate highest/lowest PE = 19.39/7.77 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0232*4 = 0.092, estimate highest/lowest PE = 13.04/8.26 (DPS 0.06)

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