KLCI Stock - AMWAY / 6351 - 2011 Quarter 4

Company Info

Market Capital (Capital Size)	1,614,267,033 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(9.82-0.66)/0.5382 = 17.02 (Moderate)
Target Price	9.69+0.66 = 10.35 (PE 18.0, EPS 0.5382, DPS 0.66)
Decision	BUY if MACD start moving back to bullish trend
Comment	Revenue decreased 13.8% and also lower than preceding year corresponding quarter 0.9%, eps decreased 3.4% but higher than preceding year corresponding quarter 36%, cash generated from operating not enough to cover dividend hence spent 9.9% of Group cash to cover all others expenses, weaker liquidity ratio from moderate to low level now, higher gearing ratio at moderate level now, debt ratio still at good level, all accounting ratio are good
First Support Price	9.8
Second Support Price	9.2
Risk Rating	MODERATE

Research House

OSK Target Price	9.86 (2011-08-11)
RHB Target Price	10 (2011-08-16)
TA Target Price	10.9 (2011-08-16)

Accounting Ratio

Return on Equity	46.78%
Dividend Yield	6.72%
Profit Margin	18.40%
Tax Rate	25.79%
Asset Turnover	2.4049
Net Asset Value Per Share	1.17
Net Tangible Asset per share	1.14
Price/Net Tangible Asset Per Share	8.6
Cash Per Share	0.75
Liquidity Current Ratio	1.8833
Liquidity Quick Ratio	1.2806
Liquidity Cash Ratio	1.0842
Gearing Debt to Equity Ratio	0.5909
Gearing Debt to Asset Ratio	0.3714
Working capital per thousand Ringgit sale	13.6%
Days to sell the inventory	43
Days to collect the receivables	11
Days to pay the payables	66

Technical Analysis

SMA 20	9.798 (Uptrend 76 days)
SMA 50	9.531 (Uptrend)
SMA 100	9.034 (Uptrend)
SMA 200	8.885 (Uptrend)
MACD (26d/12d)	0.089646 ( 0.005307 )
Signal (9)	0.106248 ( 0.00415 )
MACD Histogram	0.016602 (Bearish trend 9 days)

My notes based on 2011 quarter 4 report (number in '000):-
- Higher pbt than FY10Q4 mainly due to improved gross margin arising from the lower cost of products offset by higher advertising and promotional expenses and higher operating cost arising from investment in consumer access driven strategies

- Lower revenue and pbt mainly due to higher distributor productivity driven by sales and marketing program implemented in the preceding quarter

- Estimate next 4Q eps after 2011 Q4 result announced = 192322*0.46/164386 = 0.5382, estimate PE on current price 9.82 = 17.02(DPS 0.66)
- Estimate next 4Q eps after 2011 Q3 result announced = 0.5072*1.05 = 0.5326, estimate highest/lowest PE = 17.57/15.64 (DPS 0.62)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.4988*0.95 = 0.4739, estimate highest/lowest PE = 18.23/16.33 (DPS 0.62)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.5142*0.97 = 0.4988, estimate highest/lowest PE = 18.4/16.32 (DPS 0.66)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.4761*1.08 = 0.5142, estimate highest/lowest PE = 17.64/14.86 (DPS 0.66)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.3335+(0.1246*1.2) = 0.5497, estimate highest/lowest PE = 15.21/13.46 (DPS 0.64)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.3335+(0.1246*1.2) = 0.5497, estimate highest/lowest PE = 14.04/13.43 (DPS 0.52)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.3261+(0.099*1.1) = 0.4676(Correction to preceding Q estimated), estimate highest/lowest PE = 16.3/14.71 (DPS 0.5)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0996*4 = 0.3984, estimate highest/lowest PE = 17.62/16.99 (DPS 0.48)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1246*4 = 0.4984, estimate highest/lowest PE = 13.98/13.46 (DPS 0.48)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.099*4 = 0.396, estimate highest/lowest PE = 17.6/16.92 (DPS 0.5)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.118*4 = 0.472, estimate highest/lowest PE = 14.79/13.73 (DPS 0.52)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.1332*4 = 0.5328, estimate highest/lowest PE = 13.06/11.75 (DPS 0.54)

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