KLCI Stock - DXN / 5074 - 2011 Quarter 1

DXN HOLDINGS BERHAD

Listing Date: 30.09.2003
Market: MAIN
Sector: CONSUMER
Par Value: 0.25
Major Industry: Drugs, Cosmetics & Health Care
Sub Industry : Diversified Drugs, Cosmetics, & Health Care
Market Cap : 240764000*0.785 = 188,999,740 (Small)
NTA per share : (202977-11971)/227224 = 0.84 (Increased)
P/BV : 0.785/0.84 = 0.9345
Forecast P/E now : (0.785-0.0375)/0.1538 = 4.86 (Moderate)
ROE : 16.61% (Moderate)
DY : 0.0375/0.785*100 = 4.77% (Moderate)
Fixed Asset Turnover(3 year) : (0.8553+0.8301+0.78)/3 = 0.8218(Low)
Liquidity Ratio : 187991/94897 = 1.981 (Low)
Receivables Collection Period : (42987+50109)/2/(262957/365) = 64 days (Acceptable)
My Target Price : 0.92+0.0375 = 0.96 (PE 6, EPS 0.1538, DPS 0.0375)
My Decision : BUY
My Comment : Revenue and profit increased, good cash flow, below moderate debt and decreased, navps increasing
Technical Support Price : 0.55
Risk Rating : MODERATE

DXN HOLDINGS BERHAD is a Malaysia-based investment holding and provision of management services. The Company operates in five business segments: multi-level marketing, which is engaged in the manufacture and sale of health supplements, and other products on a multi-level marketing basis; property development, which is engaged in housing developing and contracting; energy, which is engaged in the manufacture and sale of biodiesel, and other incidental products; investment holding, which is engaged in investment holding and provision of management services, and others, which is engaged in travel agency and tour operation, information technology consultancy and advisory wholesale and retail of stationeries, household items, gifts and accessories. During the fiscal year ended February 29, 2008, the Company incorporated a 65%-owned subsidiary, Borneo Bio Best (Sabah) Sdn. Bhd. Its product lines include dietary supplements, food and beverages, personal care products and household products.

My notes based on 2011 Quarter 1 report (number in '000):-
- The Group recorded 4.6% increase of revenue for the current quarter and financial year-to date ended 31 May 2010 as compared to the corresponding quarter ended 31 May 2009. The increased was due to higher revenue contributed from multi-level marketing segment
- The Group recorded a higher profit before tax (“PBT”) with PBT margin of 18.5% for the current quarter and financial year-to date ended 31 May 2010 as compared to the corresponding quarter ended 31 May 2009 with PBT margin of 10.1%. Multi-level marketing segment has contributed higher profit margin due to cost efficiency
- The Group reported higher revenue of RM 67.8 million in the current quarter ended 31 May 2010 as compared to RM 60.1 million in the preceding quarter ended 28 February 2010. The increased was due to higher sales generated from multi-level marketing segment. The Group’s PBT for the current quarter was RM 12.5 million as compared to RM 7.3 million in the preceding quarter. The increased in the PBT was mainly due to the provision of RM5.65 million for diminution of investment in CLO subordinated bond in the preceding quarter
- Estimate next 4Q eps after 2011 Q1 result announced = 0.1465*1.05 = 0.1538, estimate PE on current price 0.785 = 4.86(DPS 0.0375)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.1238*0.9 = 0.1114(10% drop), estimate highest/lowest PE = 6.24/4.44 (DPS 0.035)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0397*4*0.8 = 0.127, estimate highest/lowest PE = 5.28/4.49 (DPS 0.035)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0615*2 = 0.123, estimate highest/lowest PE = 5.81/4.11 (DPS 0.035)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0874*1.1 = 0.0961, estimate highest/lowest PE = 6.87/3.64 (DPS 0.03)

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