KLCI Stock - GENTING / 3182 - 2010 Quarter 1

Market Cap : 3705304770*7.04 = 26,085,345,580.80 (Large)
NTA per share : 13419511/2453278 = 5.47
P/BV : 7.04/5.47 = 1.287
Forecast P/E now : (7.04-0.072)/0.3235 = 21.54 (High)
ROE : 4.04% (Low)
DY : 0.072/7.04*100 = 1.02% (Low)
Fixed Asset Turnover(3 year) : (0.2299+0.2739+0.2923)/3 = 0.2654 (Low)
Liquidity Ratio : 18251186/3583165 = 5.0936 (High)
Receivables Collection Period : (1229572+1049970)/2/(9938123/365) = 41 days (Acceptable)
My Target Price : Not interested unless ROE increase
My Decision : NOT BUY
My Comment : Revenue increased but profit remain low, still without free cash flow, debt increasing, navps decreased
Technical Support Price : 6.35, 6.2
Risk Rating : MODERATE (Due to high PE but business stable)

My notes based on 2010 Quarter 1 report (number in '000):
- The increase came mainly from the Leisure & Hospitality Division with the commencement of operations of Resorts World Sentosa in Singapore. Revenue from Resorts World Genting increased by 14% due to the higher volume of business and better luck factor in the premium players business
- Increased revenue from the Plantation Division was due to higher palm products prices as well as increased FFB production
- Lower revenue from the Power Division was due to lower generation of electricity by both the Kuala Langat and Meizhou Wan power plants
- Despite the higher average oil prices, revenue from the Oil & Gas Division decreased due to the lower share of entitlement in China
- The Group’s profit before tax for the current quarter decreased due mainly to the net impairment losses of RM1,303.8 million in the current quarter compared with RM30.4 million in the previous year’s corresponding quarter. Excluding the impact of these impairment losses, the Group generated a profit before tax of RM1.5 billion in the current quarter
- Increased profit from the Leisure & Hospitality Division is mainly attributable to the contribution from Resorts World Sentosa. Improved revenue from Resorts World Genting also contributed to increased profit
- Higher profit from the Plantation Division was due to increase in revenue
- The lower revenue from the Power Division resulted in the lower profit
- Higher expenses and lower revenue from the Oil & Gas Division contributed to the Division’s lower profit
- The share of results in jointly controlled entities and associates increased in the current quarter due mainly to share of profit from the new power plant in Andhra Pradesh, India and increased contribution from the existing power plants in India
- Estimate next 4Q eps after 2010 Q1 result announced = 0.2813*1.15 = 0.3235(15% increased), estimate PE on current price 7.04 = 21.54(DPS 0.072)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0661*4 = 0.2644, estimate highest/lowest PE = 26.77/23.18 (DPS 0.072)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0999*4 = 0.3996, estimate highest/lowest PE = 19.09/15.62 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0577*4 = 0.2308, estimate highest/lowest PE = 33.23/27.64 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0574*4 = 0.2296, estimate highest/lowest PE = 28.88/23 (DPS 0.07)

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