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Wednesday, November 23, 2011

KLCI Stock - F&N / 3689 - 2011 Quarter 4

Company Info
Market Capital (Capital Size)6,334,845,525 (Very Large)
Par ValueRM 1.00

My Analysis
Forecast P/E now(17.56-0.72)/0.8174 = 20.60 (High)
Target Price14.71+0.72 = 15.43 (PE 18.0, EPS 0.8174, DPS 0.72)
DecisionNot interested unless stock price sustain and uptrend above 16.8
Revenue increased 12.8% and also higher than preceding year corresponding period 0.5%, eps decreased 14.9% and was second consecutive quarter decreasing and also lower than preceding year corresponding quarter 18.1%, cash generated from operating not enough to cover dividend nor investing activities hence spent 69.1% of Group cash to cover, slightly stronger liquidity ratio at low level now, lower gearing ratio from above moderate to moderate level now, all accounting ratio are good, affecting by high skimmed milk powder and sugar price increasing and Coca-Cola business cease on October
First Support Price17.5
Second Support Price16.8

Research House
Maybank Target Price15.25 (2011-05-09)
MIDF Target Price18.75 (2011-05-09)
TA Target Price18.91 (2011-05-09)
CIMB Target Price13.1 (2011-08-08)
AMMB Target Price20.4 (2011-10-12)

Accounting Ratio
Return on Equity24.57%
Dividend Yield4.10%
Profit Margin7.44%
Tax Rate10.57%
Asset Turnover1.5815
Net Asset Value Per Share4.31
Net Tangible Asset per share3.96
Price/Net Tangible Asset Per Share4.33
Cash Per Share0.8
Liquidity Current Ratio1.7755
Liquidity Quick Ratio1.2329
Liquidity Cash Ratio0.4047
Gearing Debt to Equity Ratio0.5881
Gearing Debt to Asset Ratio0.3703
Working capital per thousand Ringgit sale14.2%
Days to sell the inventory41
Days to collect the receivables50
Days to pay the payables72

My notes based on 2011 quarter 4 report (number in '000):-
- Group revenue for Q4 was flat against that of last year(“LY’) which had included the revenue from the sale of Ampang development project of RM54 million. Excluding this, revenue from the F&B business recorded positive growth of +6% spurred by strong sales momentum in the soft drinks and dairies Thailand units

- Group operating profit declined 34% against LY. Excluding the profit of RM24 million mainly from the sale of Ampang development project recorded LY, F&B profit was down 12% after a RM11
million provision made during Q4 in respect of potential royalty underpayment in relation to prior years

- Lower pbt than FY11Q3 mainly due to the provision of RM11 million made during the quarter 4 in respect of potential royalty underpayment by the dairies division

- Estimate next 4Q eps after 2011 Q4 result announced = 0.2151*4*0.95 = 0.8174, estimate PE on current price 17.56 = 20.6(DPS 0.72)
- Estimate next 4Q eps after 2011 Q3 result announced = (0.3+0.2151)*2*0.7 = 0.7211, estimate highest/lowest PE = 25.64/21.43 (DPS 0.41)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.3*4 = 1.2(exclude RM53 million from sale of property income), estimate highest/lowest PE = 16.02/14.52 (DPS 0.58)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.2*4 = 0.8(around 5% ROE), estimate highest/lowest PE = 22.09/18.07 (DPS 0.545)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.875*0.95 = 0.8313, estimate highest/lowest PE = 17.58/15.82 (DPS 1.645)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.8236(correction), estimate highest/lowest PE = 17.53/15.85 (DPS 0.465)
- Estimate next 4Q eps after 2010 Q2 result announced = 1.0072(10% grow from 0.4578*2), estimate highest/lowest PE = 14.43/10.18 (DPS 0.465)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.961(10% grow from 0.2184*4), estimate highest/lowest PE = 11.06/10.44 (DPS 0.47)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.8195, estimate highest/lowest PE = 13.58/12.04 (DPS 0.47)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.8, estimate highest/lowest PE = 12.79/11.29 (DPS 0.47)

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