KLCI Stock - AHEALTH / 7090 - 2010 Quarter 3

Par Value: 1.00
Market Cap : 93716875*2.52 = 236,166,525 (Small)
NTA per share : (169826-1301)/93717 = 1.8
P/BV : 2.52/1.8 = 1.4
Forecast P/E now : (2.52-0.08)/0.3238 = 7.54 (Moderate)
ROE : 15.99% (Moderate)
DY : 0.08/2.52*100 = 3.17% (Low)
Fixed Asset Turnover(4 years) : (1.1899+1.1948+1.116+1.1771)/4 = 1.1695 (High)
Liquidity Ratio : 144590/64934 = 2.2267 (Moderate)
Receivables Collection Period : (79535+72566)/2/(306382/365) = 90 days (Acceptable)
My Target Price : 3.24+0.08 = 3.32 (PE 10, EPS 0.3238, DPS 0.076)
My Decision : BUY
My Comment : Revenue and profit increased, receivables increasing, good cash flow, below moderate debt but increasing, navps increased, all operating segments show better result than preceding year, new retail at JB open in FY10Q4
Technical Support Price : 2.4
Risk Rating : MODERATE

My notes based on 2010 quarter 3 report (number in '000):-

- For the third quarter of 2010, the Group achieved an increases of 44% pre-tax profits and 12.7% revenue respectively of that achieved in the similar period last year. Year to date, the Group recorded year-on-year growth of 44.5% pre-tax profits and 11.1% revenue respectively

- Year to date, its manufacturing division, XepaSP revenue grew 12% over the previous year, with sales to all market sectors exceeding budget expectations. Its market-leading range of cough and cold syrups was further strengthened with the launch of Sedilix Rx and Cough-en Rx formulations

- Whole sale and Distribution continued to show steady revenue growth on improved margins, helped by strong contributions from its Consumer and Pharma divisions. Revenue from the Group’s house brands of AVEX and AGNESIA, recorded growth of 25% and 14% respectively over the same period last year, due to intensified marketing efforts and export sales

- Contribution from associated company Xiamen Maidiken Science & Technology Co Ltd is RM2.7 million for the 9 months of year 2010, a growth of 59.4% over year 2009, supported by strong contributions from its distribution and retail operations in Fujian Province

- Profit before tax for the current quarter is RM9.1 million compared to RM7.82 million in the previous quarter. The 16.1% increase in profit before tax is attributed largely to increased revenue across all business units within the Group and a growing proportion of higher margin house brands in the sales mix

- Estimate next 4Q eps after 2010 Q3 result announced = 0.0771*4*1.05 = 0.3238, estimate PE on current price 2.52 = 7.54(DPS 0.08)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1334*2*1.1 = 0.2935 (0.1334 is recent 2Q cum_eps, 10% increase), estimate highest/lowest PE = 8.7/7.85 (DPS 0.076)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.32 (add 5% adjustment from 0.3048 due to profit boosted), estimate highest/lowest PE = 10.48/8.41 (DPS 0.0975)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.3048 (10% grow from 0.2771(after deducted 3.4 mil)), estimate highest/lowest PE = 10.74/6.18 (DPS 0.1975)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.2385, estimate highest/lowest PE = 8.82/7.26 (DPS 0.0975)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.2365, estimate highest/lowest PE = 7.83/6.44 (DPS 0.0975)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.2312, estimate highest/lowest PE = 6.64/5.47 (DPS 0.095)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.2168, estimate highest/lowest PE = 6.11/4.59 (DPS 0.095)

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