KLCI Stock - OSK / 5053 - 2010 Quarter 2

Market Cap : 961494248*1.34 = 1,288,402,292.32 (Large)
NTA per share : (1398268-209525)/939157 = 1.27
P/BV : 1.34/1.27 = 1.0551
Forecast P/E now : (1.34-0.075)/0.0958 = 13.2 (High)
ROE : 7.47% (Low)
DY : 0.075/1.34*100 = 5.6% (Moderate)
Fixed Asset Turnover(3 year) : Not Applicable
Liquidity Ratio : Not Applicable
Receivables Collection Period : Not Applicable
My Target Price : Not interested unless revenue and profit increase more
My Decision : NOT BUY
My Comment : Revenue and profit decreased, cash decreasing, navps decreasing
Technical Support Price : 1.28
Risk Rating : HIGH

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

- The Group's profit before tax ("PBT") for the six months ended 30 June 2010 increased by 15% as compared to the six months ended 30 June 2009. The Group's results have factored in impairment losses on private debt securities amounting to RM26.40 million. The Group also registered a 29% increase in revenue compared to the previous corresponding period. The improvement in financial performance was mainly due to improved earnings from investment banking activities

- OSK Investment Bank Berhad ("OSKIB"), the wholly-owned subsidiary of the Company is the main contributor accounting for 47% of the Group's PBT; followed by Singapore subsidiary, DMG & Partners Securities Pte. Ltd. 34%, Malaysian unit trust fund manager, OSK-UOB Unit Trust Management Berhad 10%. The balance PBT of 9% mainly contributed by Indonesian and Cambodian subsidiaries

- Investment Banking which consists mainly of Treasury, Corporate Advisory, Capital Market and
Derivative Structured Products contributed 48% of the Group’s PBT for 6M10 as compared to 26% in last year’s corresponding period

- Loan, Advances and Financing reported improved earnings which contributed about 28% of the Group's PBT. Equities & Futures broking recorded 19% of the Group's PBT

- Total PBT contribution from overseas businesses to the Group increased by 92% for 6M10 from 6M09, representing 31% of the Group's PBT (6M09: 19%)

- The Group’s Singapore operations increased its PBT contribution in 6M10 by 40% from 6M09. OSK Indochina Bank Ltd, which commenced business operations on 10 October 2008 contributed a PBT of RM234,000 and the Indonesian subsidiary contributed a PBT of RM1.88 million for the 6M10

- Estimate next Q eps after 2010 Q2 result announced = 0.0479*2 = 0.0958, estimate PE on current price 1.34 = 13.2(DPS 0.075)
- Estimate next Q eps after 2010 Q1 result announced = 0.039*4 = 0.156, estimate highest/lowest PE = 8.56/7.4 (DPS 0.075)
- Estimate next Q eps after 2009 Q4 result announced = 0.0449*4 = 0.1796, estimate highest/lowest PE = 8.21/6.38 (DPS 0.075)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0525*4 = 0.21, estimate highest/lowest PE = 8.38/6.9 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0570*4 = 0.228, estimate highest/lowest PE = 6.62/5.83 (DPS 0.05)
- After 2009 Q1 loss result announced, no estimate
- Estimate next 4Q eps after 2008 Q4 result announced = 0.0240*4 = 0.096, estimate highest/lowest PE = 14.32/7.86 (DPS 0.075)

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