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Tuesday, October 4, 2011

KLCI Stock - PPB / 4065 - 2011 Quarter 2

Company Info
Market Capital (Capital Size)19,039,128,104 (Very Large)
Par ValueRM 1.00

My Analysis
Forecast P/E now(16.06-0.28)/0.8862 = 17.81 (Moderate)
Target Price15.95+0.28 = 16.23 (PE 18.0, EPS 0.8862, DPS 0.28)
DecisionNot interested unless stock price sustain above 16.6
Revenue increased 16.6% and also higher than preceding year corresponding quarter 16.4%, eps increased 4.2% and was second consecutive quarter increasing but lower than preceding year corresponding quarter 13%, no cash generated from operating after capital changes but cash generated from financing and investing is more than enough to cover all expenses, weaker liquidity ratio but still at strong level now, slightly higher gearing ratio at very low level now, all accounting ratio are good, affecting by high wheat price
First Support Price15.8
Second Support Price15.2

Research House
HwangDBS Target Price15 (2011-03-04)
AMMB Target Price19.35 (2011-07-06)
WILSON & YORK Target Price20.28 (2011-08-29)

Accounting Ratio
Return on Equity7.18%
Dividend Yield1.74%
Profit Margin43.57%
Tax Rate2.47%
Asset Turnover0.1696
Net Asset Value Per Share11.41
Net Tangible Asset per share11.35
Price/Net Tangible Asset Per Share1.52
Cash Per Share0.86
Liquidity Current Ratio5.6677
Liquidity Quick Ratio4.3247
Liquidity Cash Ratio2.915
Gearing Debt to Equity Ratio0.0339
Gearing Debt to Asset Ratio0.0318
Working capital per thousand Ringgit sale66.5%
Days to sell the inventory77
Days to collect the receivables70
Days to pay the payables48

My notes based on 2011 quarter 2 report (number in '000):-
- Higher revenue was due mainly to higher revenue from most divisions

- The grains trading, flour and feed milling division contributed higher profits due to higher sales whilst livestock farming registered a profit compared with a loss previously

- However, there was a one-off gain of RM22.3 million from sale of investment property in 2010, and a lower profit was registered in the investments in equities due to a fair value loss in the current period. Wilmar International Limited, an associate of the Group, contributed RM432 million for the period under review which was marginally lower than RM452 million last year

- Higher pbt mainly higher dividend income from quoted investments but offset by lower profits due to lower margins from grains trading, flour and feed milling division

- Estimate next 4Q eps after 2011 Q2 result announced = 0.2332*4*0.95 = 0.8862, estimate PE on current price 16.06 = 17.81(DPS 0.18)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.2237*4*0.95 = 0.8501, estimate highest/lowest PE = 20.88/18.88 (DPS 0.25)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.2429*4*1.05 = 1.0202, estimate highest/lowest PE = 18.25/15.57 (DPS 0.18)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.268*4*1.1 = 1.1792, estimate highest/lowest PE = 14.73/12.56 (DPS 0.23)
- Estimate next 4Q eps after 2010 Q1 result announced = 1.2268+0.0127 = 1.2395 (adjustment from 0.242-0.2293, 0.242 represent eps excluded disposal of assets), estimate highest/lowest PE = 13.61/11.54 (DPS 0.73)
- Estimate next 4Q eps after 2009 Q4 result announced = 1.2268 (10% drop from 1.3631), estimate highest/lowest PE = 14.4/12.48 (DPS 0.73)
- Estimate next 4Q eps after 2009 Q3 result announced = 1.2357, estimate highest/lowest PE = 13.15/11.79 (DPS 0.73)
- Estimate next 4Q eps after 2009 Q2 result announced = 1.2152, estimate highest/lowest PE = 13.13/12.22 (DPS 0.23)
- Estimate next 4Q eps after 2009 Q1 result announced = 1.0309, estimate highest/lowest PE = 14.7/9.96 (DPS 0.23)

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