KLCI Stock - GENM / 4715 - 2010 Quarter 2

Market Cap : 5907080648*3.04 = 17,957,525,169.92 (Very Large)
NTA per share : (10083678-11576)/5707855 = 1.76
P/BV : 3.04/1.76 = 1.7272
Forecast P/E now : (3.04-0.079)/0.2431 = 12.18 (Moderate)
ROE : 12.93% (Moderate)
DY : 0.079/3.04*100 = 2.6 (Low)
Fixed Asset Turnover(4 year) : (0.4498+0.4737+0.4872+0.4716)/4 = 0.4706 (Low)
Liquidity Ratio : 6221279/1080456 = 5.758 (Strong)
Receivables Collection Period : (191492+206587)/2/(5183118/365) = 14 days (Good)
My Target Price : 2.91+0.079 = 2.99 (PE 12, EPS 0.2431, DPS 0.079)
My Decision : NOT BUY unless price below 2.7
My Comment : Revenue QbQ, good cash flow, debt decreasing, navps slightly decreased
Technical Support Price : 2.7
Risk Rating : LOW
OSK Target Price : 2.96 (27 Aug 10)

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

- Total revenue increased by 2% mainly due to the better underlying performance of the leisure and hospitality business. The improved financial performance was mainly due to better luck factor in the premium players business in the current quarter ended 30 June 2010

- Profit before taxation was 6% lower mainly due to:
i. fair value loss of RM34.0 million arising from the Group’s investments in financial assets at fair value through profit or loss
ii. gain on disposal of investments of RM15.8 million in the same quarter last year

- Excluding the fair value loss, gain on disposal of investments and interest & investment income, the Group’s profit before taxation would have increased by 3%

- The Group registered a 4.1% higher profit before taxation in the current quarter ended 30 June
2010 compared with the preceding quarter ended 31 March 2010

- The higher profit before taxation is mainly due to:
i. impairment loss arising from the Group’s investment in AFS of RM108.0 million
ii. fair value loss of RM34.0 million arising from the Group’s investments in FVTPL during the current quarter ended 30 June 2010
iii. weaker luck factor in the premium players business and lower volume of business during the current quarter ended 30 June 2010

- Estimate next 4Q eps after 2010 Q2 result announced = 0.2315*1.05 = 0.2431, estimate PE on current price 3.04 = 12.18(DPS 0.079)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.2315*1.05 = 0.2431, estimate highest/lowest PE = 12.66/9.82 (DPS 0.073)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0628*4 = 0.2512, estimate highest/lowest PE = 11.25/9.7 (DPS 0.073)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0629*4 = 0.2516, estimate highest/lowest PE = 11.45/10.33 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0577*4 = 0.2308, estimate highest/lowest PE = 12.35/11.44 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0481*4 = 0.1924, estimate highest/lowest PE = 15.23/12.79 (DPS 0.07)

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