KLCI Stock - FAVCO / 7229 - 2011 Quarter 4

Company Info

Market Capital (Capital Size)	256,208,838 (Small)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(1.43-0.06)/0.2777 = 4.93 (Moderate)
Target Price	2.22+0.06 = 2.28 (PE 8.0, EPS 0.2777, DPS 0.06)
Decision	BUY if MACD back to uptrend and got strong buying volume than selling
Comment	Revenue increased 67.7% and also higher than preceding year corresponding quarter 81%, eps increased 28.1% and was third consecutive quarter increasing and also higher than preceding year corresponding quarter 94.9%, cash generated from operating is more than enough to cover all expenses, better gross and operating profit margin, slightly better liquidity ratio at low level now, slightly lower gearing ratio but still at very high level now, all accounting ratio also high, lower debt ratio at historical low, higher inventory can indicate better demand of Group products
First Support Price	1.35
Second Support Price	1.25
Risk Rating	MODERATE

Research House

CIMB Target Price

1.23 (2011-11-24)

Accounting Ratio

Return on Equity	19.71%
Dividend Yield	4.20%
Gross Profit Margin	26.58%
Operating Profit Margin	15.44%
Net Profit Margin	12.82%
Tax Rate	13.29%
Asset Turnover	0.712
Net Asset Value Per Share	1.31
Net Tangible Asset per share	1.27
Price/Net Tangible Asset Per Share	0.98
Cash Per Share	0.63
Liquidity Current Ratio	1.3117
Liquidity Quick Ratio	0.6004
Liquidity Cash Ratio	0.2683
Gearing Debt to Equity Ratio	1.8483
Gearing Debt to Asset Ratio	0.6455
Working capital per thousand Ringgit sale	27.5%
Days to sell the inventory	293
Days to collect the receivables	197
Days to pay the payables	208

Technical Analysis

SMA 20	1.43 (Uptrend 23 days)
SMA 50	1.346 (Uptrend)
SMA 100	1.274 (Uptrend)
SMA 200	1.247 (Same)
MACD (26d/12d)	0.024385 ( 0.001364 )
Signal (9)	0.030348 ( 0.001491 )
MACD Histogram	0.005963 (Bearish trend 6 days)

My notes based on 2011 quarter 4 report (number in '000):-
- Higher revenue and pbt mainly due to increase in sales from crane segment which due to global recovery in investment in equipment and good execution of several high margin projects

- As at 16 February 2012, outstanding order book of the group is RM657.7 million of which majority is from the oil and gas cranes for the offshore oil and gas exploration and production activities. Remaining are from the shipyard, construction and wind turbine industry

- Estimate next 4Q eps after 2011 Q4 result announced = 241502*0.21/182623 = 0.2777, estimate PE on current price 1.43 = 4.93(DPS 0.05)
- Estimate next 4Q eps after 2011 Q3 result announced = 0.2047*0.8 = 0.1638, estimate highest/lowest PE = 8.12/6.84 (DPS 0.05)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.0955*1.2 = 0.1146, estimate highest/lowest PE = 11.08/6.94 (DPS 0.05)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0217*4*1.1 = 0.0955(lower down estimate due to previous high profit was from other income), estimate highest/lowest PE = 18.43/10.99 (DPS 0.05)
- Estimate next 4Q eps after 2011 Q3 result announced = 0.1362, estimate highest/lowest PE = 10.5/7.05 (DPS 0.04)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.1602*0.85 = 0.1362(450 million equal to 15% decrease from 2009 Q4 cum_eps), estimate highest/lowest PE = 8.37/5.58 (DPS 0.04)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.1442*0.7 = 0.1009 (30% drop from 0.1442, revenue drop and margin expect will not increase much), estimate highest/lowest PE = 8.42/7.04 (DPS 0.04)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.1442(10% drop from 0.1602, revenue drop and margin expect will not increase much), estimate highest/lowest PE = 6.93/4.92 (DPS 0.04)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1442, estimate highest/lowest PE = 5.76/4.99 (DPS 0.025)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.1442, estimate highest/lowest PE = 6.45/5.49 (DPS 0.025)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.1442, estimate highest/lowest PE = 8.11/5.72 (DPS 0.025)

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