KLCI Stock - DAYANG / 5141 - 2010 Quarter 3

Par Value: 0.50
Market Cap : 352000000*2.71 = 953,920,000 (Medium)
NTA per share : 355037/352000 = 1.01
P/BV : 2.71/1.01 = 2.6832
Forecast P/E now : (2.71-0.05)/0.2314 = 11.5 (Moderate)
ROE : 15.7% (Moderate)
DY : 0.05/2.71*100 = 1.85 (Low)
Fixed Asset Turnover(2 year) : (0.4114+0.5966)/2 = 0.504 (Low)
Liquidity Ratio : 174997/56489 = 3.0979 (High)
Receivables Collection Period : (108538+73855)/2/(211295/365) = 157 days
My Target Price : 3.01+0.05 = 3.06 (PE 13, EPS 0.2314, DPS 0.05)
My Decision : BUY
My Comment : Revenue and profit increasing, receivables increasing, good cash flow, below moderate debt, navps slightly increasing, order book increasing, oil price increasing, gas price decreasing, more Petronas jobs to release
Technical Support Price : 2.35
Risk Rating : MODERATE
Hwang DBS Target Price : 3.4 (09 Nov 10)

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

- Comparatively, the Group’s revenue for the current quarter ended 30 September 2010 increased by 47% while profit before tax (excluding share of results of an associate) and total comprehensive income for the current quarter increased by 112% and 105% respectively, when compared to the quarter ended 30 September 2009. The higher revenue in the current quarter as compared to the corresponding quarter is mainly due to higher value of work orders received and performed in the current quarter

- Whilst revenue increased by 47%, profit before tax (excluding share of results of an associate) for the current quarter increased by 112% in view of the fact that the work orders in the current quarter have a higher profit margin contribution

- The Group’s associate, Syarikat Borcos Shipping Sdn Bhd, contributed a profit of approximately RM1.8 million, further increasing the group’s total profit before tax for the current quarter by 16%

- In the opinion of the Directors, the results for the current quarter and financial year-to-date have not been affected by any transactions or events of a material nature which have arisen between 30 September 2010 and the date of this report

- In the current quarter, the Group’s revenue was 28% higher, the profit before tax (excluding share of results of an associate) was 33% higher and the total comprehensive income was 57% higher compared to the preceding quarter

- The higher revenue for the current quarter as compared to the preceding quarter is mainly due to higher work orders received and performed in the current quarter

- Whilst revenue increased by 28%, profit before tax increased by 33% in view of the fact that the work orders in the current quarter have a higher profit margin contribution as compared to those of the preceding quarter

- The Group’s associate, Syarikat Borcos Shipping Sdn Bhd contributed a profit of approximately an increase of 767% from the preceding quarter

- Estimate next 4Q eps after 2010 Q3 result announced = 0.0526*4*1.1 = 0.2314, estimate PE on current price 2.71 = 11.5(DPS 0.05)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1239*1.1 = 0.1363 (0.1239 is recent 4Q cum_eps), estimate highest/lowest PE = 21.94/14.16 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.129/4(average eps from recent 4Q)*0.9 = 0.1161 (10% drop year-to-year), estimate highest/lowest PE = 16.67/12.79 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.1237*0.9 = 0.1113(10% drop year-to-year), estimate highest/lowest PE = 19.14/14.82 (DPS 0.05, correction to last Q estimated)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1246, estimate highest/lowest PE = 16.21/9.71 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.1548, estimate highest/lowest PE = 8.98/6.91 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.1338, estimate highest/lowest PE = 8.67/3.73 (DPS 0.14)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.15, estimate highest/lowest PE = 7.87/ (DPS 0.14)

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