KLCI Stock - SUNWAY / 4308 - 2010 Quarter 2

Market Cap : 602046705*1.53 = 920,707,954.65 (Medium)
NTA per share : (846452-127842)/620493 = 1.16
P/BV : 1.53/1.16 = 1.4037
Forecast P/E now : (1.53-0.02)/0.1972 = 5.92 (Low)
ROE : 14.41% (Moderate)
DY : 0.02/1.53*100 = 1.31% (Low)
Fixed Asset Turnover(4 year) : (0.8252+0.7728+0.9025+0.9279)/4 = 0.8571 (Low)
Liquidity Ratio : 1356955/1012873 = 1.3397 (Low)
Receivables Collection Period : (707659+688821)/2/(1923906/365) = 132 days (Slightly long)
My Target Price : 1.97+0.02 = 1.99 (PE 10, EPS 0.1972, DPS 0.02)
My Decision : BUY
My Comment : Revenue slightly increased but Group's segments result decreased, jointly controlled entities from property development largely improved, good cash flow, high debt but decreasing, navps increased, construction job increasing
Technical Support Price : 1.5, 1.4
Risk Rating : MODERATE
OSK Target Price : 2.52 (25 Aug 10)

My notes based on 2010 Quarter 2 report (number in '000):

- The Group recorded revenue of RM509.2 million and profit before taxation of RM59.2 million,
which include RM5.7 million non-operating income, during the quarter under review

- The Group’s operating performance continued to be contributed by the construction, property
development and trading and manufacturing divisions

- The Group performed better during the current quarter with 1.5% higher revenue as compared to the revenue in the immediate preceding quarter. The Group’s profit before taxation also grew by 17% from the last preceding quarter

- Without incorporating the non-operating income mentioned in above as well as excluding the gains arising from the adoption of FRS 139, the current quarter’s adjusted profit before taxation was higher than the previous quarter’s by 18%

- The quarter-on-quarter improvement in operating results were as a result of the recognition of profit from the Group’s second property development project in Singapore, as well as stronger margins from the trading division

- Estimate next 4Q eps after 2010 Q2 result announced = 0.058*0.85*4 = 0.1972(15% deduction adjustment due to segments result 20% lower than preceding quarter), estimate PE on current price 1.57 = 7.86(DPS 0.02)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.058(exclude FRS 139)*4*1.1 = 0.2552(10% QbQ improvement adjustment), estimate highest/lowest PE = 6.54/5.09 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q6 result announced = 0.041*4*1.1 = 0.1804, estimate highest/lowest PE = 9.48/7.1 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q5 result announced = 0.0318*4 = 0.1272, estimate highest/lowest PE = 11.95/8.88 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0352*4*1.1 = 0.1549, estimate highest/lowest PE = 9.36/8.26 (DPS 0.03)

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