KLCI Stock - HSPLANT / 5138 - 2010 Quarter 1

Market Cap : 800000000*2.32 = 1,856,000,000 (Large)
NTA per share : 1716515/799992 = 2.15
P/BV : 2.32/2.15 = 1.0791
Forecast P/E now : (2.32-0.09)/0.2006 = 11.12 (Moderate)
ROE : 7.25% (Low)
DY : 0.09/2.32*100 = 3.88% (Low)
Fixed Asset Turnover(2 year) : (0.1984+0.2137)/2 = 0.2061 (Low)
Liquidity Ratio : 123622/64105 = 1.9284 (Low)
Receivables Collection Period : (14784+14041)/2/(401283/365) = 13 days (Good)
My Target Price : 2.41+0.09 = 2.5 (PE 12, EPS 0.2006, DPS 0.09)
My Decision : BUY
My Comment : Revenue and profit increased compared to previous year, good cash flow, low debt and decreasing, navps increasing, monthly production increased, CPO price increasing
Technical Support Price : 2.2
Risk Rating : MODERATE

My notes based on 2010 quarter 1 report (number in '000):-
- Revenue for the current quarter under review was 38% higher than the preceding year corresponding quarter with higher sales volume and higher average selling prices of Crude Palm Oil (CPO) and Palm Kernel (PK)
- During the current quarter, 34,402 tonnes of CPO and 8,037 tonnes of PK were sold as compared to 30,145 tonnes of CPO and 6,442 tonnes of PK in the preceding year corresponding quarter. Generally, the Group benefited from better fresh fruit bunches (FFB) yield and oil extraction rate attributable to seasonal cropping pattern and changes in weather conditions. In the preceding year corresponding quarter extremely wet conditions were experienced in the Group’s plantations
- Average selling price of CPO and PK achieved for the current quarter were RM2,476 and RM1,359 per tonne compared to the preceding year corresponding quarter of RM2,143 and RM812 per tonne respectively
- Production costs for the current quarter were significantly lower than the preceding year corresponding quarter mainly due to lower fertilizers prices
- Consequently, the Group’s current quarter profit before tax and profit after tax were higher than the preceding year corresponding quarter by 165% and 162% respectively
- Group profit before tax for the current quarter was 10% lower than the preceding quarter of mainly attributable to lower sales volume of CPO and PK due to lower FFB production resulting from the dry weather conditions in the early part of the year
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0456*1.1*4 = 0.2006, estimate PE on current price 2.32 = 11.12(DPS 0.09)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0396*4 = 0.1584, estimate highest/lowest PE = 15.4/12.31 (DPS 0.09)

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