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Saturday, November 5, 2011

KLCI Stock - TOPGLOV / 7113 - 2011 Quarter 4

Company Info
Market Capital (Capital Size)2,603,939,570 (Large)
Par ValueRM 0.50

My Analysis
Forecast P/E now(4.21-0.12)/0.251 = 16.29 (High)
Target Price4.02+0.12 = 4.14 (PE 16.0, EPS 0.251, DPS 0.12)
DecisionBUY if stock price next uptrend start above 4.1
Revenue increased 1.2% and was second consecutive quarter increasing and also higher than preceding year corresponding quarter 0.1%, eps increased 2% and was second consecutive quarter increasing but still lower than preceding year corresponding quarter 42.6%, cash generated from operating enough to cover financing expenses but spent 43.5% of Group cash in investing activities, stronger liquidity ratio at high level now, lower gearing ratio at below moderate level now, all accounting ratio are good, benefit from strengthening of USD against MYR and latex price decreasing
First Support Price4.1
Second Support Price3.9

Research House
Kenanga Target Price3.97 (2011-06-17)
Citi Target Price5.95 (2011-06-20)
RHB Target Price4.23 (2011-08-15)
Affin Target Price4.62 (2011-09-08)
MIDF Target Price4.18 (2011-09-13)
AMMB Target Price3.1 (2011-09-29)
Maybank Target Price3.4 (2011-10-05)
HwangDBS Target Price4.05 (2011-10-12)
OSK Target Price4 (2011-10-12)
CIMB Target Price3.29 (2011-10-19)

Accounting Ratio
Return on Equity9.86%
Dividend Yield2.61%
Profit Margin6.46%
Tax Rate23.23%
Asset Turnover1.4701
Net Asset Value Per Share1.8
Net Tangible Asset per share1.76
Price/Net Tangible Asset Per Share2.31
Cash Per Share0.41
Liquidity Current Ratio3.3889
Liquidity Quick Ratio2.5261
Liquidity Cash Ratio1.2645
Gearing Debt to Equity Ratio0.2226
Gearing Debt to Asset Ratio0.1789
Working capital per thousand Ringgit sale23.7%
Days to sell the inventory33
Days to collect the receivables43
Days to pay the payables38

My notes based on 2011 Quarter 4 report (number in '000):-
- The decline in profit compared to FY10Q4 was mainly due to continuously high volatility in latex price, the weaker US dollar against the Ringgit and the oversupply situation in the industry which resulted in a lower cost pass through to the customers. The average natural latex prices rose by 45.8% (from RM6.12/kg in FY2010 to RM8.92/kg in FY2011) while the average US dollar against the Ringgit weakened by 8.1% (from RM3.32 in FY2010 to RM3.05 in FY2011). The comparability of the figures is also affected by the previous year's exceptionally high earnings, which had been boosted by the surge in demand for rubber gloves during the influenza A(H1N1) virus outbreak

- Higher pbt than FY11Q3 mainly due to decline in latex prices by 10% from the previous quarter and the increase in the sales of nitrile gloves

- Estimate next 4Q eps after 2011 Q4 result announced = (0.0417*1.4)+(0.0417*1.4*1.1*3) = 0.251, estimate PE on current price 5.26 = 22.87(DPS 0.1)
- Estimate next 4Q eps after 2011 Q3 result announced = 0.047*4*1.2 = 0.2256, estimate highest/lowest PE = 25.62/16.62 (DPS 0.1)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.08+0.088+0.0968+0.1065 = 0.3713, estimate highest/lowest PE = 15.19/13.74 (DPS 0.23)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.2122*4 = 0.8488*1.1 = 0.9337(10% adjustment), estimate highest/lowest PE = 15.5/10.36 (DPS 0.29)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.235*4 = 0.94, estimate highest/lowest PE = 14.68/11.66 (DPS 0.22)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.217*4 = 0.868, estimate highest/lowest PE = 14.31/10.75 (DPS 0.22)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.191*4 = 0.764, estimate highest/lowest PE = 12.23/10.2 (DPS 0.22)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1424*4 = 0.5696, estimate highest/lowest PE = 14.04/10.8 (DPS 0.15)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.1221*4 = 0.4884, estimate highest/lowest PE = 13.21/9.89 (DPS 0.15)

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