KLCI Stock - SUPERMX / 7106 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	1,295,695,046 (Large)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(3.81-0.08)/0.3636 = 10.26 (Moderate)
Target Price	4.36+0.08 = 4.44 (PE 12.0, EPS 0.3636, DPS 0.08)
Decision	BUY if stock price next uptrend start above 3.6
Comment	Revenue increased 14.1% and also higher than preceding year corresponding quarter 15.4%, eps increased 36.5% but lower than preceding year corresponding quarter 19.1%, cash generated from operating more than enough to cover all expenses, stronger liquidity ratio at moderate level now, lower gearing ratio from moderate to below moderate level now, all accounting ratio are good, higher inventory can indicate strong demand of sales, benefit from strengthening of USD against RM, benefit from latex price declining
First Support Price	3.6
Second Support Price	3.2
Risk Rating	MODERATE

Research House

AMMB Target Price	5.9 (2011-07-15)
Kenanga Target Price	3.22 (2011-08-24)
TA Target Price	3.5 (2011-08-24)
Affin Target Price	4.36 (2011-09-08)
CIMB Target Price	4.38 (2011-10-28)
OSK Target Price	5.5 (2011-11-14)

Accounting Ratio

Return on Equity	15.07%
Dividend Yield	2.76%
Profit Margin	12.56%
Tax Rate	9.36%
Asset Turnover	0.8772
Net Asset Value Per Share	2.21
Net Tangible Asset per share	2.13
Price/Net Tangible Asset Per Share	1.51
Cash Per Share	0.22
Liquidity Current Ratio	2.4415
Liquidity Quick Ratio	1.4336
Liquidity Cash Ratio	0.3904
Gearing Debt to Equity Ratio	0.4889
Gearing Debt to Asset Ratio	0.3284
Working capital per thousand Ringgit sale	28.3%
Days to sell the inventory	79
Days to collect the receivables	75
Days to pay the payables	29

My notes based on 2011 quarter 3 report (number in '000):-
- Higher revenue due to higher overall utilisation rate as a result of increased production output from refurbished lines at some of the older plants

- Lower pbt than FY10Q3 because of continuously high volatility in both natural rubber and nitrile latex prices. Compared to a year ago, the price of natural rubber latex has risen by 23.4%(RM8.63 vs RM6.99) while nitrile latex prices have increased even more sharply by 41.6%(RM6.43 vs RM4.54)

- Higher pbt than FY11Q2 benefited from 11% lower natural rubber latex prices(RM8.63 vs RM9.7), although nitrile latex prices had continued to rise @ 12.2%(RM6.43 vs RM5.73) and a relatively stable USD:RM exchange rate environment

- Estimate next 4Q eps after 2010 Q3 result announced = 0.0909*4 = 0.3636(cautious of RM8.9 million profit was from other income), estimate PE on current price 3.81 = 10.26(DPS 0.08)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.075*4*1.1 = 0.33(exclude RM4 million bond write off), estimate highest/lowest PE = 10.68/6.62 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0718*4*1.1 = 0.3159, estimate highest/lowest PE = 12.42/9.58 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0962*4 = 0.3848, estimate highest/lowest PE = 11.55/9.94 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1124*4*1.1 = 0.4946, estimate highest/lowest PE = 9.31/7.77 (DPS 0.135)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1351*4*0.9 = 0.4864(correction), estimate highest/lowest PE = 10.82/7.43 (DPS 0.135)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.6576+0.0253 = 0.6829, estimate highest/lowest PE = 10.38/8.77 (DPS 0.11)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.1644*4 = 0.6576, estimate highest/lowest PE = 11.16/8.24 (DPS 0.11)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1514*4 = 0.6056, estimate highest/lowest PE = 10.15/5.3 (DPS 0.0325)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0972*4 = 0.3888, estimate highest/lowest PE = 8.74/5.14 (DPS 0.0325)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0743*4 = 0.2972, estimate highest/lowest PE = 6.52/5.01 (DPS 0.0325)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.2499, estimate highest/lowest PE = 6.67/3.07 (DPS 0.0325)

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