KLCI Stock - AIRPORT / 5014 - 2010 Quarter 1

Par Value: 1.00
Market Cap : 1100000000*4.81 = 5,291,000,000 (Large)
NTA per share : 3326371/1100000 = 3.02
P/BV : 4.81/3.02 = 1.5927
Forecast P/E now : (4.81-0.229)/0.3086 = 14.84 (High)
ROE : 10.55% (Moderate)
DY : 0.08/4.18*100 = 1.91% (Low)
Fixed Asset Turnover(3 year) : (0.3359+0.2586+0.3195)/3 = 0.3047 (Low)
Liquidity Ratio : 970882/1075002 = 0.9031 (Low)
Receivables Collection Period : (338106+608354)/2/(1681087/365) = 102 days (Acceptable)
My Target Price : 4.01+0.23 = 4.24 (EPS 0.3086, PE 13, DPS 0.229)
My Decision : NOT BUY unless price below 4.3
My Comment : Revenue increased but cost also increased, bad cash flow, moderate debt and decreased, navps decreased
Technical Support Price : 4.8, 4.7
Risk Rating : MODERATE
OSK Target Price : 5.5 (12 March 2010)

My notes based on 2010 Q1 report (number in '000):
- The consolidated revenue of the Group for the current quarter under review was higher than the corresponding period last year by 11.89% mainly from airport operations, driven by stronger recovery in air travel demand
- Passenger movements for the current quarter was 21.04% higher than the corresponding period last year, in which the international and domestic passenger improved by 31.43% and 12.72% respectively
- The improved revenue was also as a result of growth in retail business and higher rental revenue derived from additional commercial space
- Profit before tax (PBT) for the current quarter under review was slightly lower than the corresponding period last year by 4.90% mainly due to the adoption of FRS 139 resulting in the higher share of losses in an associate company, whereby, the concession payable by the associate company was recognised at fair value and subsequently at amortized cost
- Stripping out the FRS 139 effects, the profit before tax for the current quarter was RM 139.92 million, 12% higher than the corresponding period last year. The improved PBT was due to the overall higher revenue achieved in the current quarter
- In addition, the preceding year corresponding quarter PBT figure had included a reversal of lease rental payable to the Government totalling RM 52.0 million and a backdated user fee amount in respect of financial year 2008 paid to the Government of RM45.8 million subsequent to the signing of the Operating Agreements
- There were also other one-off transactions pursuant to the signing of the Operating Agreements. However, after considering the said transactions, operationally, the Group had performed better as reflected by the higher passenger and revenue numbers
- The consolidated revenue of the Group for the current quarter under review was 8.48% below the immediate preceding quarter. The adverse variance was due to lower revenue from airport operations which decreased by 9.0%, attributed mainly to lower passenger movements by 7.23%. The non-aeronautical revenue however, improved by 3.44% which was mainly contributed by revenue derived from rental upon completion of the KLIA LCCT expansion in April 2009 and Retail Optimization Plan at the KLIA Satellite Building and Contact Pier in November 2009
- The current quarter also showed a 41% decrease in the revenue from non-airport operations as compared to the immediate preceding quarter mainly due to lower revenue derived from the project management segment
- Profit before tax for the current quarter under review was lower than the immediate preceding quarter by 24.61% mainly due to lower revenue, higher share of associate losses and higher depreciation expense. The depreciation expense in the immediate preceding quarter was lower due to the adjustment made for revision of assets useful life
- Estimate next 4Q eps after 2010 Q1 result announced = 0.3429-(0.3429*0.1) = 0.3086 (10% drop from 0.3429), estimate PE on current price 4.81 = 14.84(DPS 0.229)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.086*4 = 0.344, estimate highest/lowest PE = 13.97/12.89 (DPS 0.233)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0758*4 = 0.3032, estimate highest/lowest PE = 15.72/11.36 (DPS 0.233)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.068*4 = 0.272, estimate highest/lowest PE = 13.18/11.6 (DPS 0.1855)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0695*4 = 0.278, estimate highest/lowest PE = 13.07/10.27 (DPS 0.1855)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.069*4 = 0.276, estimate highest/lowest PE = 12.37/7.63 (DPS 0.1855)

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