KLCI Stock - MMCCORP / 2194 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	8,708,867,458 (Very Large)
Par Value	RM 0.10

My Analysis

Forecast P/E now	(2.86-0.035)/0.1208 = 23.39 (Moderate)
Target Price	3.02+0.035 = 3.06 (PE 25.0, EPS 0.1208, DPS 0.035)
Decision	BUY if stock price near to SMA20 and got stronger buying volume than selling
Comment	Revenue increased 3.1% and was second consecutive quarter increasing and also higher than preceding year corresponding quarter 11.9%, eps increased 12.3% and was second consecutive quarter increasing but still lower than preceding year corresponding quarter 22%, cash generated from operating more than enough to cover all expenses, higher liquidity ratio but still at low level now, slightly lower gearing ratio at very high ratio now, all accounting ratio are good, benefit from MRT projects
First Support Price	2.7
Second Support Price	2.4
Risk Rating	MODERATE

Research House

Kenanga Target Price	3.1 (2011-12-05)
HwangDBS Target Price	3.7 (2012-02-13)
OSK Target Price	3.7 (2012-02-13)

Accounting Ratio

Return on Equity	3.05%
Dividend Yield	1.22%
Profit Margin	11.82%
Tax Rate	22.91%
Asset Turnover	0.2601
Net Asset Value Per Share	2.21
Net Tangible Asset per share	-0.31
Price/Net Tangible Asset Per Share	-8.16
Cash Per Share	1.62
Liquidity Current Ratio	1.5584
Liquidity Quick Ratio	1.4225
Liquidity Cash Ratio	0.9402
Gearing Debt to Equity Ratio	3.7816
Gearing Debt to Asset Ratio	0.7054
Working capital per thousand Ringgit sale	31.1%
Days to sell the inventory	35
Days to collect the receivables	90
Days to pay the payables	97

Technical Analysis

SMA 20	2.819 (Uptrend 34 days)
SMA 50	2.672 (Uptrend)
SMA 100	2.592 (Uptrend)
SMA 200	2.658 (Uptrend)
MACD	0.096053 (Downtrend 1 day)
MACD Histogram	0.022676 (Uptrend 33 days)

My notes based on 2011 quarter 3 report (number in '000):-
- Higher profit recorded from Energy & Utilities division due to lower other operating expenses, improved associates performance and lower finance cost as a result of loan repayments offset by lower margins on new gas tariff

- Higher profit recorded from Transport & Logistics division mainly driven by the increase in throughput volume and lower operating cost

- Better performance from the Engineering & Construction division mainly due to the absence of profit revisions for the double track project and lower provision on project losses of Zelan Berhad, an associate company of the group

- Lower contribution from Corporate & Others division due to lower gain on disposal of investment compared against the previous coupled with higher finance cost

- Estimate next 4Q eps after 2011 Q3 result announced = 0.0302*4 = 0.1208, estimate PE on current price 2.86 = 23.39(DPS 0.035)
- Estimate next 4Q eps after 2011 Q2 result announced = (0.0269*3+0.0141)*1.1 = 0.1043, estimate highest/lowest PE = 25.84/20.76 (DPS 0.035)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.1133*1.05 = 0.119, estimate highest/lowest PE = 24.08/18.61 (DPS 0.035)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.1133, estimate highest/lowest PE = 25.99/22.29 (DPS 0.035)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0676*2*1.1 = 0.1487, estimate highest/lowest PE = 21.45/17.82 (DPS 0.03)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0402*2*1.1 = 0.0884, estimate highest/lowest PE = 37.56/27.94 (DPS 0.03)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0777*1.1 = 0.0855, estimate highest/lowest PE = 31.23/25.73 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0777*1.1 = 0.0855, estimate highest/lowest PE = 29.82/25.38 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0297*4*0.9 = 0.1069, estimate highest/lowest PE = 23.43/20.63 (DPS 0.025)

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