KLCI Stock - TOPGLOV / 7113 - 2010 Quarter 4

Par Value: 0.50
Market Cap : 618189362*5.39 = 3,332,040,661.18 (Large)
NTA per share : (1093286-20113)/619768 = 1.73
P/BV : 5.39/1.73 = 3.1156
Forecast P/E now : (5.39-0.23)/0.3713 = 13.9 (Moderate)
ROE : 21.95% (High)
DY : 0.23/5.39*100 = 4.2672% (Moderate)
Fixed Asset Turnover(4 year) : (1.5351+1.3528+1.2419+1.1662)/4 = 1.324 (High)
Liquidity Ratio : 736709/199798 = 3.6873 (High)
Receivables Collection Period : (233028+198263)/2/(2079432/365) = 37 days (Good)
My Target Price : 5.57+0.23 = 6 (PE 15, EPS 0.3713, DPS 0.23)
My Decision : BUY
My Comment : Revenue slow down, profit decreasing, good cash flow, low debt and decreasing, navps consider increasing, USD a bit signal to recover, latex price still increasing
Technical Support Price : 5.1
Risk Rating : LOW
OSK Target Price : 6.06 (07 Oct 10)

My notes based on 2010 Quarter 4 report (number in '000):

- The Group sales revenue for the 12 months ended 31 August 2010 has increased by 36% from last year. The profit before tax for 12 months ended 31 August 2010 compare with the same period
last year has increased by 38%

- The Group strong performance for financial year 2010 was attributed to the strong demand of gloves from the healthcare sector and new demand from emerging markets, which demand for gloves is expected to continue to register double digit growth. The Group performance was also attributed to the continuous cost saving measures implemented at all factories, improvements in product quality, productivity, as well as aggressive marketing strategies to maintain its world number one market position

- The Group registered PBT of RM42.2 million for the current quarter compared with RM83.3 million in quarter ended 31 May 2010. PBT for the 3 months period just ended declined due to normalising demand, and persistently high latex prices and weakening of US Dollars, which affected the Group’s revenue and profit margins

- Todate, latex price has increased by around 55% and USD has weakened against RM by around 13% since beginning of the financial year 2010 (12 months ago)

- Estimate next 4Q eps after 2010 Q4 result announced = 0.08+0.088+0.0968+0.1065 = 0.3713, estimate PE on current price 5.39 = 13.9(DPS 0.23)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.2122*4 = 0.8488*1.1 = 0.9337(10% adjustment), estimate highest/lowest PE = 15.5/10.36 (DPS 0.29)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.235*4 = 0.94, estimate highest/lowest PE = 14.68/11.66 (DPS 0.22)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.217*4 = 0.868, estimate highest/lowest PE = 14.31/10.75 (DPS 0.22)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.191*4 = 0.764, estimate highest/lowest PE = 12.23/10.2 (DPS 0.22)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1424*4 = 0.5696, estimate highest/lowest PE = 14.04/10.8 (DPS 0.15)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.1221*4 = 0.4884, estimate highest/lowest PE = 13.21/9.89 (DPS 0.15)

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