KLCI Stock - EKSONS / 9016 - 2011 Quarter 1

Market Cap : 164213000*0.99 = 162,570,870 (Small)
NTA per share : (352273-26763)/164213 = 1.98
P/BV : 0.99/1.98 = 0.5
Forecast P/E now : (0.99.0.05)/0.2365 = 4.19 (Low)
ROE : 9.52% (Low)
DY : 0.05/0.94*100 = 5.32% (Moderate)
Fixed Asset Turnover(3 year) : (0.6417+0.5467+0.7983)/3 = 0.6622 (Low)
Liquidity Ratio : 241942/79116 = 3.0581 (High)
Receivables Collection Period : (30474+79173)/2/(291048/365) = 68 days (Acceptable)
My Target Price : 1.18+0.05 = 1.23 (PE 5, EPS 0.2365, DPS 0.05)
My Decision : BUY
My Comment : Revenue recovering from year 2009, average eps of recent 4Q eps was above 0.05, good cash flow, low debt, navps increasing, property division going to receive progress billing
Technical Support Price : 0.86
Risk Rating : HIGH

My notes based on 2011 quarter 1 report (number in '000):

- The timber division recorded a 20.6% higher turnover and 175% higher profit after taxation for the quarter under review compared to the corresponding period of the previous financial year. The higher turnover and profit after tax is due to higher plywood sales volume

- The property division got no recognition of revenue for the period under review as construction work had just started in May 2010. The division recorded a loss after tax if RM1.3 million for the quarter under review. In the corresponding quarter of the previous financial year, the division recorded a loss of RM2.4 million. The loss for both periods comprise mainly of management and marketing expenses

- Profit after taxation for the quarter under review is RM8.7 million while the profit after taxation for the immediate preceding quarter was RM13.5 million. Included in the immediate
preceding quarter’s profit after taxation is an income amounting to RM9.9 million arising from an adjustment to development cost recognised upon the acquisition of the Company’s subsidiary Russella Teguh Sdn Bhd

- The timber division’s turnover for the quarter under review recorded 2.1% lower and 94.1% higher profit after taxation compared to the immediate preceding quarter

- The property division’s loss after taxation for the period under review is RM1.3 million. In the immediate preceding quarter, the division’s loss after taxation was RM1.2 million

- During the quarter under review construction work commenced for several shop office blocks. The first progress billings for the division were made in July 2010

- Estimate next 4Q eps after 2011 Q1 result announced = 0.0563*4*1.05 = 0.2365, estimate PE on current price 0.99 = 4.19(DPS 0.05)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.11*0.9 = 0.099(0.11 is year 2010 cum_eps excluded 9.9 million and 10% negative adjustment for those tax refund), estimate highest/lowest PE = 8.18/7 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.11, estimate highest/lowest PE = 9.82/7.36 (DPS 0.02)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1, estimate highest/lowest PE = 8.95/7.5 (DPS 0.02)

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