KLCI Stock - TGUAN / 7034 - 2010 Quarter 2

Market Cap : 105204500*0.9 = 82,585,532.50 (Small)
NTA per share : 212124/105205 = 2.02
P/BV : 0.9/2.02 = 0.4455
Forecast P/E now : (0.9-0.04)/0.16 = 5.38 (Moderate)
ROE : 8.71% (Low)
DY : 0.04/0.9*100 = 4.44% (Moderate)
Fixed Asset Turnover(3 year) : (1.4204+1.7454+1.6725)/3 = 1.6128 (High)
Liquidity Ratio : 199307/83005 = 2.4011 (Moderate)
Receivables Collection Period : (68192+61498)/2/(438083/365) = 54 days (Acceptable)
My Target Price : 0.96+0.04 = 1 (PE 6, EPS 0.16, DPS 0.04)
My Decision : NOT BUY unless price below 0.83
My Comment : Revenue increasing, profit recovering since year 2009, cash increased to a highest level, below moderate debt but increased, navps increasing
Technical Support Price : 0.76
Risk Rating : HIGH

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

- Group revenue for the six months ended 30 June 2010 was 18.42% increase compared with the
six months ended 30 June 2009. Group profit before taxation for the period ended 30 June 2010 was 32.86% increase over the corresponding period in 2009. The increase in revenues were mainly due to the higher average prices of raw materials which translated to higher selling prices as well as the increase in export volume of the group's products compared to the corresponding period in 2009

- For the three months second quarter ended 30 June 2010, Group revenue grew by 8.74% while profit before taxation decreased by 22.73% as compared to the corresponding quarter in 2009. The increase in revenues were mainly due to the higher average prices of raw materials compared to the corresponding period in 2009 which translated to higher selling prices. The drop in profit
before taxation was mainly due to lower profit margin compared to the corresponding quarter in 2009

- The revenue for the quarter ended 30 June 2010 decreased by 2.65% while profit before taxation
decreased by 30.36% as compared to the preceding quarter. The decrease in revenue and profit before tax was mainly due to the drop in average prices of raw material during the current quarter compared to the preceding quarter which also resulted in lower demand for the group's plastic packaging products

- Estimate next 4Q eps after 2010 Q2 result announced = 0.04*4 = 0.16, estimate PE on current price 0.92 = 5.5(DPS 0.04)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.1351*1.1 = 0.1486 (10% increase), estimate highest/lowest PE = 7.81/4.98 (DPS 0.04)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.1351 (revenue growth but cost also increasing), estimate highest/lowest PE = 5.92/5.26 (DPS 0.04)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.134, estimate highest/lowest PE = 6.42/5.45 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.1138, estimate highest/lowest PE = 7.73/6.63 (DPS 0.02)

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