KLCI Stock - HUAAN / 2739 - 2010 Quarter 1

Market Cap : 1122307817*0.385 = 432,088,509.55 (Small)
NTA per share : 702117/1122308 = 0.63
P/BV : 0.385/0.63 = 0.6111
Forecast P/E now : Not Interested
ROE : Negative
DY : Not Applicable
Fixed Asset Turnover(3 year) : (1.6683+1.6059+1.1782)/3 = 1.4841 (High)
Liquidity Ratio : 218122/102861 = 2.1206 (Moderate)
Receivables Collection Period : (49631+116130)/2/(1342935/365) = 22 days (Good)
My Target Price : Not interested unless revenue increase and cost decrease
My Decision : NOT BUY
My Comment : Revenue increased but cost also increased, good cash flow, low debt, navps decreased
Technical Support Price : Not Available
Risk Rating : HIGH
OSK Target Price : 0.7

My notes based on 2010 Q1 report (number in '000):
- The Group recorded approximately 20% increase in the consolidated revenue from RM310.9 million in the preceding year corresponding quarter to RM373.6 million registered in the current quarter
under review can be attributed to the favourable upward trend experienced by the Group in the pricing of metallurgical coke and majority of the by-products in the current quarter
- The average prices of metallurgical coke, ammonium sulphate, crude benzene, tar oil, coal slime and middlings during the current quarter under review have increased by approximately 23%, 4%, 157%, 80%, 57% and 13% respectively compared with those of the preceding year corresponding quarter. Meanwhile, the price of coal gas has remained fairly constant in the current quarter compared to the same quarter last year
- Despite the seemingly favourable pricing of metallurgical coke and the majority of the by-products as mentioned above, the cost of sales have also increased by approximately 13% to RM367.9 million in the current quarter compared to RM324.5 million recorded in the preceding year corresponding quarter. This is primarily attributed to the significant increase in the average prices of raw material (i.e. coking coal) by approximately 29% in the current quarter compared to the average prices registered in the preceding year corresponding quarter
- The Group’s consolidated revenue of approximately RM373.6 million registered during the current quarter represents an increase of approximately 18% from approximately RM317.7 million in the preceding quarter ended 31 December 2009. The increase in revenue was primarily attributed to the higher average price of metallurgical coke coupled with favourable pricing of its by-products. The average metallurgical coke price has increased by 17% in the current quarter under review compared to that of recorded in the preceding quarter
- Cost of sales in the current quarter has correspondingly increased from RM318.6 million in the preceding quarter ended 31 December 2009 to RM367.9 million, an increase of approximately 15%. This was attributed to higher average coking coal price of approximately 18% in the current quarter compared to that of the preceding quarter
- Whilst the Group saw a gradual improvement in the average prices of metallurgical coke and the by-products during the current quarter under review, the extent of such improvements appeared to be inadequate to cover the extent of increase seen in the average prices of the coking coal. As a result, the Group continues to register a loss for the period of approximately RM2.5 million in the current quarter under review compared to a loss for the period of approximately RM2.3 million in the preceding quarter
- No estimate for next 4Q

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