KLCI Stock - SIME / 4197 - 2010 Quarter 3

Market Cap : 6009463831*7.8 = 46,873,817,881.80 (Large)
NTA per share : (20976800-122100)/6009500 = 3.47
P/BV : 7.8/3.47 = 2.2478
Forecast P/E now : Not available
ROE : 8.18% (Low)
DY : 0.223/7.8*100 = 2.86% (Low)
Fixed Asset Turnover(3 year) : (0.835+0.9565+0.9642)/3 = 0.9186 (Moderate)
Liquidity Ratio : 19168400/10667800 = 1.7968 (Moderate)
Receivables Collection Period : (5585200+5758800)/2/(31274800/365) = 66 days (Acceptable)
My Target Price : Not interested unless energy and utilities division recover
My Decision : NOT BUY
My Comment : Revenue slightly increased but loss due to energy and utilities division, good cash flow, debt increasing, navps decreasing
Technical Support Price : 7.47
Risk Rating : HIGH (Due to energy and utilities division big loss)
My Target Price : 6.74 (31 May 10)

My notes based on 2010 Quarter 3 report (number in '000):-
- Plantation registered a 45% increase in profit mainly due to the higher fresh fruit bunches (FFB) production from Indonesia, the improved results from downstream operations and the higher average crude palm oil price realised of RM2,277 per tonne compared to RM2,127 per tonne for the previous year. FFB production in Indonesia increased by 23% to 2.56 million tonnes due to the higher matured hectarage and improved yield. However, the FFB production in Malaysia decreased by 5% to 5.03 million tonnes due to replanting and unfavourable weather. The downstream operations reverted back to profitability due to lower feedstock costs
- Property posted a higher profit of 69% largely attributable to the higher residential and commercial sales in the Group’s townships and a RM37.5 million gain from disposal of a subsidiary
- Profit from Industrial declined by 15% mainly due to the lower demand for new equipment in Singapore and Australia. This was partially mitigated by the higher parts and services sales in Australia, higher equipment sales in China and the RM19.0 million gain from the disposal of a property in Malaysia
- The results for Motors surged by 71% mainly driven by the strong regional sales. Operations in New Zealand reported a positive result while losses in Australia narrowed as compared to the previous year
- Energy & Utilities off-shore engineering and fabrication projects, Qatar Petroleum and Maersk Oil Qatar (MOQ), incurred losses due to difficulties and challenges which resulted in delays and cost overruns. In addition, Energy & Utilities anticipates that the construction of marine vessels for use in the MOQ project and the Bakun hydroelectric dam project, would have foreseeable losses upon completion. As of 31 March 2010, these four projects cumulatively resulted in a negative impact of approximately RM1.3 billion out of which about RM1.0 billion was provided in the current quarter. Although the oil & gas and engineering sectors reported losses, the power and utilities sectors performed better than last year, reporting an improvement in profit of 116%. This was due to better operational results in the current period from the power plants in Thailand. The previous year’s results were also affected by the charge of RM29.3 million from the “One-off Contribution” levied on Port Dickson Power Berhad and impairment on certain assets amounting to RM15.0 million
- Earnings from Healthcare & Others improved from RM4.2 million to RM80.3 million due to the better performance from all operating sectors. This was also due to a reversal of impairment loss on an associate of RM17.0 million as compared to a provision for impairment of an investment of RM49.9 million, which was made in the previous year’s corresponding period
- No estimate next 4Q eps after 2010 Q3 result announced
- Estimate next 4Q eps after 2010 Q2 result announced = 0.37, estimate PE on current price 8.44 = 22.22(DPS 0.22)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.34, estimate highest/lowest PE = 26.44/23.76(DPS 0.2)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.37, estimate highest/lowest PE = 24.43/21.59 (DPS 0.2)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.34, estimate highest/lowest PE = 24.35/18.91 (DPS 0.27)

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