KLCI Stock - BSTEAD / 2771 - 2010 Quarter 1

Market Cap : 940162499*3.82 = 3,591,420,746.18 (Large)
NTA per share : (3976800-1015100)/925100 = 3.2
P/BV : 3.82/3.2 = 1.19
Forecast P/E now : (3.82-0.275)/0.4934 = 7.18 (Low)
ROE : 8.21%
DY : 0.275/3.82*100 = 7.2% (High)
Fixed Asset Turnover(3 year) : (0.6225+0.7449+0.7793)/3 = 0.7156 (Low)
Liquidity Ratio : 2248400/4329300 = 0.5193 (Weak)
Receivables Collection Period : (1138500+964901)/2/(5729522/365) = 66 days (Acceptable)
My Target Price : NOT interested unless cash flow improve
My Decision : NOT BUY
My Comment : Revenue increasing, profit increasing, remain bad cash flow, remain high debt but slightly decreased, navps increased
Technical Support Price : 3.5
Risk Rating : MODERATE (Due to weak liquidity)

My notes based on 2010 Q1 report (number in '000):
- For the current quarter, the Group posted an unaudited 56% higher profit before tax compared to the previous year's first quarter
- Group revenue for the current quarter was 28% higher than that recorded during the corresponding period last year. Notable increase in revenue from both the Plantation and Trading Divisions was attributable to the stronger palm product prices and higher sales volume respectively
- For the 1st quarter, the Plantation Division contributed a significantly higher pre-tax profit of RM62.3 million (2009: RM23.7 million). During the period, the Division achieved an average palm oil price of RM2,499 per MT, an increase of RM613 or 33% against last year corresponding period's average of RM1,886 per MT. The FFB crop totalling 305,335 MT was 1.5% better than the corresponding period last year
- The Heavy Industries Division contributed a pre-tax profit of RM23.4 million, as compared with last year’s profit of RM30.9 million mainly due to lower progress billings. Property Division's pre-tax profit of RM6.3 million for the three months period was lower than last year mainly due to lower contribution from property development activity and hotel operations, while the retail mall operations had performed better on improved occupancy and rental rates
- The Finance & Investment Division posted a pre-tax profit of RM17.6 million for the three months, representing a 319% increase from last year corresponding period's profit of RM4.2 million. The Affin Group ended the quarter with a higher pretax profit of RM177.3 million (Last year: RM120.3 million) on the back of good performance from major operating units which registered a drop in loan loss provision while Islamic banking income and other operating income were also higher
- The Trading Division's pre-tax profit of RM19.6 million was a significant increase from last year corresponding period's profit of RM3.2 million, mainly due to the stronger performance from BHPetrol which enjoyed a 60% revenue growth which boosted operating income while stockholding gains enhanced the bottom line further
- Plantation profit for the current quarter of RM62.3 million was 157% higher than the preceding quarter. CPO price for the current quarter improved to RM2,499 (Previous quarter: RM2,166) per MT while the FFB crop was also 10% better. Property division’s pre-tax profit for the preceding quarter was significantly higher than the current quarter mainly due to the inclusion of fair value gain on its portfolio of investment properties
- The Heavy Industries Division’s profit for the current quarter was lower than the preceding quarter in tandem with the drop in progress billings. Finance & Investment Division’s profit for the preceding quarter was significantly higher, mainly because our subsidiary BH Insurance had posted a very strong profit from a higher investment income and lower claims provision during that period
- Estimate next 4Q eps after 2010 Q1 result announced = 0.4699*1.05 = 0.4934(5% increase), estimate PE on current price 3.83 = 7.18 (DPS 0.275)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.4934, estimate highest/lowest PE = 7.1/6.31 (DPS 0.275)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1241*4 = 0.4964, estimate highest/lowest PE = 6.89/6.06 (DPS 0.25)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0721*4 = 0.2884, estimate highest/lowest PE = 12.17/10.92 (DPS 0.2)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0934*4 = 0.3736, estimate highest/lowest PE = 11.78/8.94 (DPS 0.2)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.1699*4 = 0.6796, estimate highest/lowest PE = 5.15/3.97 (DPS 0.3)

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