KLCI Stock - TCHONG / 4405 - 2010 Quarter 1

Market Cap : 672000000*4.4 = 2,956,800,000 (Moderate)
NTA per share : 1572509/652819 = 2.41
P/BV : 4.4/2.41 = 1.8257
Forecast P/E now : (4.4-0.11)/0.3964 = 10.82 (Moderate)
ROE : 11.28% (High)
DY : 0.11/4.4*100 = 2.5% (Low)
Fixed Asset Turnover(3 year) : (1.1821+1.4395+1.1076)/3 = 1.2431 (High)
Liquidity Ratio : 1563683/702485 = 2.2259 (Moderate)
Receivables Collection Period : (395443+342738)/2/(3034359/365) = 44 days (Acceptable)
My Target Price : 4.76+0.11 = 4.87 (PE 12, EPS 0.3964, DPS 0.11)
My Decision : BUY
My Comment : Revenue and profit increased, normal cash flow, moderate debt, navps increasing
Technical Support Price : 3.75
Risk Rating : LOW
OSK Target Price : 5.73 (27 May 10)

My notes based on 2010 Q1 report (number in '000):
- Tan Chong Group has made a volume led recovery in 2010. Revenue in Q1 2010 grew 25.6% over the same period of last year. Our core NISSAN models gained market share in the rising tide. Top-line growth was achieved notwithstanding tight control over cost increases through careful budgeting, detailed analysis and constant surveillance. This produced a strong bottom-line of 9.91sen EPS on the back of RM64.7 million net profit and RM88.9 million profit before tax.
- During the quarter, revenue, pretax profit and earnings built upon the recovery in Q4 2009 increased by 20.9%, 108.2% and 51.4% respectively. Foreign exchange gains from a stronger Ringgit were minimal in this quarter. There was however, a RM6 million marked to market paper loss on forward contracts for hedging purposes under FRS 139
- Quarterly operating cash inflow has returned above the RM102 million-mark last seen in 2008. Net gearing has risen to 10.2% from 7.3% of shareholders’ equity in Q4 2009 on the back of higher working capital to support more sales
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0991*4 = 0.3964, estimate PE on current price 4.4 = 10.82(DPS 0.11)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0639*4 = 0.2556, estimate highest/lowest PE = 19.91/10.92 (DPS 0.11)
- Estimate next 4Q eps after 2009 Q3 result announced =0.0527*4 = 0.2108, estimate highest/lowest PE = 16.65/10.44 (DPS 0.1)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0528*4 = 0.2112, estimate highest/lowest PE = 12.31/8.19 (DPS 0.1)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0626*4 = 0.2504, estimate highest/lowest PE = 7.35/5.39 (DPS 0.1)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.0425*4 = 0.17, estimate highest/lowest PE = 9.12/6.12 (DPS 0.1)