KLCI Stock - RSAWIT / 5113 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	1,229,994,647 (Large)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(0.94-0.02)/0.06 = 15.33 (Moderate)
Target Price	0.96+0.02 = 0.98 (PE 16.0, EPS 0.06, DPS 0.02)
Decision	BUY if stock price below or near to SMA20
Comment	Revenue increased 4.7% and was third consecutive quarter increasing and also higher than preceding year corresponding quarter 67.9%, eps decreased 26.8% and also lower than preceding year corresponding quarter 38.2%, cash generated from operating not enough for financing expenses but got enough cash generated from financing activities to cover all expenses, slightly higher liquidity ratio but still at very weak level now, lower gearing ratio but still at high level now, payables ratio got improved but still very high level now, going to benefit from increasing of CPO price
First Support Price	0.9
Second Support Price	0.84
Risk Rating	MODERATE

Accounting Ratio

Return on Equity	10.98%
Dividend Yield	2.13%
Profit Margin	23.78%
Tax Rate	23.16%
Asset Turnover	0.2423
Net Asset Value Per Share	1.36
Net Tangible Asset per share	1.14
Price/Net Tangible Asset Per Share	0.75
Cash Per Share	0.01
Liquidity Current Ratio	0.2103
Liquidity Quick Ratio	0.1496
Liquidity Cash Ratio	0.0112
Gearing Debt to Equity Ratio	1.4951
Gearing Debt to Asset Ratio	0.5592
Working capital per thousand Ringgit sale	-100.9%
Days to sell the inventory	43
Days to collect the receivables	65
Days to pay the payables	282

Technical Analysis

SMA 20	0.901 (Uptrend 13 days)
SMA 50	0.847 (Uptrend)
SMA 100	0.592 (Uptrend)
SMA 200	0.509 (Uptrend)
MACD	0.08773 (Downtrend 4 days)
MACD Histogram	-0.010316 (Downtrend 19 days)

My notes based on 2011 quarter 3 report (number in '000):-
- Higher revenue mainly attributed by more favourable average crude palm oil (“CPO”) and palm kernel (“PK”) prices realised and higher volume of fresh fruit bunches (‘FFB”) production

- The higher FFB production for the current quarter also attributed by the addition of nine plantation estates and one commercial rights on plantation estate since September 2010

- The Group also achieved an increase in sales volume of CPO and PK

- The average selling prices also increased for CPO and PK

- Higher pbt than corresponding periods of last year principally due to higher prices on palm products and higher FFB production

- Lower pbt than FY11Q2 mainly due to higher dosage and more manuring rounds and lower average selling prices for CPO and PK

- Estimate next 4Q eps after 2011 Q3 result announced = 17855/1308505*4*1.1 = 0.06, estimate PE on current price 0.94 = 15.33
- Estimate next 4Q eps after 2011 Q2 result announced = 0.113/4*2*1.1 = 0.0622, estimate highest/lowest PE = 16.4/7.15 (DPS 0.02)

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