KLCI Stock - IOICORP / 1961 - 2010 Quarter 4

Market Cap : 6676161280*5.25 = 35,049,846,720 (Very Large)
NTA per share : (10780181-513830)/6625148 = 1.55
P/BV : 5.25/1.55 = 3.3871
Forecast P/E now : (5.25-0.17)/0.3478 = 14.61 (Moderate)
ROE : 17.41% (Moderate)
DY : 0.17/5.25*100 = 3.24% (Low)
Fixed Asset Turnover(4 year) : (0.7232+0.9136+0.8496+0.6544)/4 = 0.7852 (Low)
Liquidity Ratio : 7160110/1432634 = 4.9979 (Strong)
Receivables Collection Period : (1345913+1430657)/2/(12542962/365) = 40 days (Acceptable)
My Target Price : 5.56+0.17 = 5.73 (PE 16, EPS 0.3478, DPS 0.17)
My Decision : BUY
My Comment : Revenue decreased but profit increased, good cash flow, above moderate debt but decreasing, navps increased, shares increasing, CPO price increasing, monthly production increasing
Technical Support Price : 5
Risk Rating : LOW

My notes based on 2010 quarter 4 report (number in '000):

- The plantation segment reported a 6% increase in operating profit for Q4 FY2010 as compared to Q4 FY2009. The higher profit is due mainly to an improvement in CPO prices realised. Average CPO prices realised for Q4 FY2010 is RM2,504/MT compared to RM2,455/MT for Q4 FY2009

- The property segment’s operating profit for Q4 FY2010 is 28% lower than Q4 FY2009. The lower profit reported is mainly due to lower appreciation in value of investment properties of the Group compared to FY2009. In Q4 FY 2010, the net fair value gain recognised is RM21.0 million (Q4 FY2009 - RM110.8 million). After excluding the net fair value gain, the operating profit for Q4 FY2010 would be 9% higher than Q4 FY2009

- The resource-based manufacturing segment reported a 28% lower operating profit in Q4
FY2010 compared to Q4 FY2009. The lower profit is mainly attributable to lower margins from the refinery operations

- Group pre-tax profit for Q4 is 13% lower than Q3 due mainly to lower unrealized translation gain on USD denominated borrowings

- Plantation operating profit for Q4 is 3% lower than the preceding quarter, mainly due to lower production

- Operating profit from the property segment for Q4 is 53% higher than Q3. The higher profit is contributed by a gain of RM34.9 million recognized on the disposal of a property development subsidiary

- The resource-based manufacturing segment reported a 6% higher profit in Q4 FY2010 than Q3 FY2010 due to increase in margins from the specialty fats operations

- Estimate next 4Q eps after 2010 Q4 result announced = 0.0828*4*1.05 = 0.3478, estimate PE on current price 5.25 = 14.61(DPS 0.17)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0692*1.1*4 = 0.3045, estimate highest/lowest PE = 16.62/1 (DPS 0.09)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0729*4 = 0.2916, estimate highest/lowest PE = 19.31/17.46 (DPS 0.09)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0737*4 = 0.2948, estimate highest/lowest PE = 18.86/16.72 (DPS 0.07)

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