KLCI Stock - XINQUAN / 5155 - 2012 Quarter 2

Company Info

Market Capital (Capital Size)	282,743,600 (Small)
Par Value	USD 0.10

My Analysis

Forecast P/E now	0.92/0.4321 = 2.13 (Moderate)
Target Price	0.4321*4.0 = 1.73 (PE 4.0, EPS 0.4321)
Decision	BUY if stock price start stay far from Bolinger lower band
Comment	Revenue increased 4.1% and was third consecutive quarter increasing and also higher than preceding year corresponding quarter 11.7%, eps decreased 15.9% and was second consecutive quarter decreasing but still higher than preceding year corresponding quarter 32.5%, cash generated from operating after deducted receivables increased not enough to cover financing expenses but manage to increased borrowings to cover all expenses, gross profit margin increasing but operating profit margin decreasing, stronger liquidity ratio at strong level now, lower gearing ratio at low level now, lower debt ratio at historical low level now, receivables increase rate consider fast but compared cash flow to last year is improved, all segment growth
First Support Price	0.9
Second Support Price	0.84
Risk Rating	MODERATE

Research House

Mercury Target Price

1.3 (2012-02-23)

Accounting Ratio

Return on Equity	27.81%
Dividend Yield	-
Gross Profit Margin	32.82%
Operating Profit Margin	17.49%
Net Profit Margin	17.41%
Tax Rate	20.61%
Asset Turnover	1.239
Net Asset Value Per Share	1.8
Net Tangible Asset per share	1.8
Price/Net Tangible Asset Per Share	0.53
Cash Per Share	0.75
Liquidity Current Ratio	5.6726
Liquidity Quick Ratio	5.3783
Liquidity Cash Ratio	2.6182
Gearing Debt to Equity Ratio	0.1621
Gearing Debt to Asset Ratio	0.1395
Working capital per thousand Ringgit sale	51.6%
Days to sell the inventory	17
Days to collect the receivables	111
Days to pay the payables	44

Technical Analysis

SMA 20	0.938 (Downtrend 17 days)
SMA 50	0.919 (Uptrend)
SMA 100	0.867 (Same)
SMA 200	0.94 (Downtrend)
MACD (26d/12d)	-0.003481 ( 0.000589 )
Signal (9)	0.002925 ( 0.001601 )
MACD Histogram	0.006406 (Bearish trend 26 days)

My notes based on 2012 quarter 2 report (number in '000):
- Higher revenue and pbt than FY11Q2 mainly due to increase in sales volume of shoe sole and apparel and increase in average selling price of shoe and increase in average selling price of apparels

- Lower pbt than FY12Q1 mainly due to the higher selling and distribution costs

- Estimate next 4Q eps after 2012 Q2 result announced = 553353*0.24/307330 = 0.4321(or after adjustment of issue new securities = 0.4321*0.8696 = 0.3758), estimate PE on current price 0.92 = 2.13
- Estimate next 4Q eps after 2012 Q1 result announced = 0.4(or after adjustment of issue new securities = 0.4*0.8696 = 0.3478), estimate highest/lowest PE = 2.99/1.91
- Estimate next 4Q eps after 2011 Q4 result announced = 0.3845*1.05*0.8696 = 0.3511(adjustment of issue new securities), estimate highest/lowest PE = 2.76/2.18
- Estimate next 4Q eps after 2011 Q3 result announced = 0.3154*1.1 = 0.3469, estimate highest/lowest PE = 3.32/2.31 (DPS 0.05)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.3452*1.1 = 0.3797, estimate highest/lowest PE = 3.56/2.82 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.3452*1.1 = 0.3797, estimate highest/lowest PE = 4.87/3.56 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.095*4 = 0.38(0.095 is average of recent 2Q minus little eps due to end of tax exemption and reduction), estimate highest/lowest PE = 4.93/2.91 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1584*2*1.1 = 0.3485, estimate highest/lowest PE = 3.77/3 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0834*4 = 0.3336, estimate highest/lowest PE = 4.2/3.15
- Estimate next 4Q eps after 2009 Q4 result announced = 0.4288, estimate highest/lowest PE = 3.59/3.03

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