KLCI Stock - NCB / 5509 - 2010 Quarter 2

Par Value: 1.00
Market Cap : 470252708*3.66 = 1,721,124,911.28 (Large)
NTA per share : (1854569-61192)/470253 = 3.81
P/BV : 3.66/3.81 = 0.9606
Forecast P/E now : (3.66-0.28)/0.3408 = 9.92 (High)
ROE : 8.58% (Low)
DY : 0.28/3.66*100 = 7.65% (High)
Fixed Asset Turnover(3 year) : (0.4247+0.4391+0.471)/3 = 0.4449 (Low)
Liquidity Ratio : 1036070/173006 = 5.9886 (Strong)
Receivables Collection Period : (203522+143312)/2/(880002/365) = 71 days (Acceptable)
My Target Price : 3.58+0.28 = 3.86 (PE 10.5, EPS 0.3408, DPS 0.28)
My Decision : NOT BUY unless price below 3.6
My Comment : Revenue increased but profit eps lower, good cash flow, low debt but slightly increased, navps decreased, strong cash, port throughput increasing, halal logistics division expanding
Technical Support Price : 3.57
Risk Rating : LOW
OSK Target Price : 3.9 (24 Aug 10)

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

- The Group’s revenue for the current quarter is 13.5% higher than the corresponding comparative quarter’s. The port operating subsidiary contributed RM177.0 million while the haulage/logistics
subsidiary contributed RM50.8 million. The year-to-date revenue of the Group recorded an increase of 12.5% compared to the corresponding period. The increase in revenue for the current quarter was mainly due to increased business volume undertaken by the port operating subsidiary

- Northport achieved a throughput during the current quarter of 879,610 TEUs reflecting an increase of 29.6% as compared to the corresponding period last year of 678,929 TEUs. The year-to-date throughput achieved is 1,659,477 TEUs representing an increase of 27.7% compared against the corresponding period last year of 1,299,562 TEUs

- As for the haulage division in the haulage/logistics subsidiary the total volume handled during the quarter is 59,783 TEUs which is a decrease of 11.2% as compared to the figure for the corresponding quarter in 2009 of 67,328 TEUs. The year-to-date volume achieved is 121,688 TEUs representing a decrease of 4.2% compared to the figure for the corresponding period last year of 126,959 TEUs

- For the second quarter under review, the increase in the volume handled at Northport was recorded in all categories i.e. import, export and transshipment. The increase in business was mainly due to improved business volume from customers due to the recovery of economy

- The profit before tax for the current quarter is 11.8% higher than the immediate preceding quarter’s profit before tax

- The increased profit figure is mainly due to increase in business volume undertaken by the port operating subsidiary and to a lesser extent the saving in costs achieved by the port operating subsidiary during the quarter as a flow-through effect of the cost saving initiatives introduced during the preceding year

- Estimate next 4Q eps after 2010 Q2 result announced = 0.1623*2*1.05 = 0.3408, estimate PE on current price 3.66 = 9.92(DPS 0.28)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.3383(add adjustment of 0.0183), estimate highest/lowest PE = 10.4/8.34 (DPS 0.28)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.32(around 7% grow from 0.2999, expect improve in first half quarter, second half remain), estimate highest/lowest PE = 10.84/9.19 (DPS 0.28)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.3124, estimate highest/lowest PE = 9.57/8.8 (DPS 0.25)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.2617, estimate highest/lowest PE = 10.89/10.2 (DPS 0.25)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.2647, estimate highest/lowest PE = 10.96/9.03 (DPS 0.25)

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