KLCI Stock - KNM / 7164 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	1,201,311,111 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(1.2-0.02)/0.08 = 14.75 (High)
Target Price	1.12+0.02 = 1.14 (PE 14.0, EPS 0.08, DPS 0.02)
Decision	Not interested unless stock price sustain above 1.16 and 1.1
Comment	Revenue increased 31.8% and was second consecutive quarter increasing and also higher than preceding year corresponding quarter 42%, eps decreased 42.8% and was third consecutive quarter decreasing but still higher than preceding year corresponding quarter 208.3%, cash generated from operating is more than enough to cover all expenses, slightly weaker liquidity ratio at low level now, higher gearing ratio at high level now, all accounting ratio are good, profit mostly came from tax income, core business still facing lower margin issue
First Support Price	1.16
Second Support Price	1.1
Risk Rating	MODERATE

Research House

AMMB Target Price	3.25 (2011-03-04)
Kenanga Target Price	3.06 (2011-03-08)
MIDF Target Price	3.2 (2011-08-01)
ECM Target Price	2.25 (2011-08-23)
Maybank Target Price	1.19 (2011-08-23)
OSK Target Price	2.2 (2011-08-23)
TA Target Price	2.53 (2011-08-23)
Affin Target Price	1.05 (2011-09-06)
HwangDBS Target Price	1.35 (2011-10-04)
RHB Target Price	0.7 (2011-10-04)

Accounting Ratio

Return on Equity	5.99%
Dividend Yield	2.50%
Profit Margin	0.33%
Tax Rate	-
Asset Turnover	0.4439
Net Asset Value Per Share	1.87
Net Tangible Asset per share	0.33
Price/Net Tangible Asset Per Share	4.36
Cash Per Share	0.48
Liquidity Current Ratio	1.0871
Liquidity Quick Ratio	0.6696
Liquidity Cash Ratio	0.3456
Gearing Debt to Equity Ratio	1.1596
Gearing Debt to Asset Ratio	0.5354
Working capital per thousand Ringgit sale	6.7%
Days to sell the inventory	125
Days to collect the receivables	195
Days to pay the payables	175

My notes based on 2011 quarter 2 report (number in '000):-
- Higher revenue due to higher revenue recognition

- Lower pbt due to slower improvement in capacity utilization in certain operating units

- Estimate next 4Q eps after 2011 Q2 result announced = 0.0889*0.9 = 0.08, estimate PE on current price 1.2 = 14.75(DPS 0.02)
- Estimate next 4Q eps after 2011 Q1 result announced = (0.0194+0.021)*2*1.1 = 0.0889, estimate highest/lowest PE = 27.33/15.75 (DPS 0.02)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0655*2*1.1 = 0.1441, estimate highest/lowest PE = 20.12/15.68 (DPS 0.03)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0089*4*1.2 = 0.0427(use VAT 15%, include incoming new contract), estimate highest/lowest PE = 15.36/10.54
- No estimate for next 4Q eps after 2010 Q2 result announced
- No estimate for next 4Q eps after 2010 Q1 result announced
- No estimate for next 4Q eps after 2009 Q4 result announced
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0081*4 = 0.0324, estimate highest/lowest PE = 11.67/9.39 (DPS 0.015)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0181*4 = 0.0724, estimate highest/lowest PE = 11.67/9.39 (DPS 0.015)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0250*4 = 0.1, estimate highest/lowest PE = 10.45/7
- Estimate next 4Q eps after 2008 Q4 result announced = 0.0214*4 = 0.0856, estimate highest/lowest PE = 9.7/3.56 (DPS 0.015)

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