KLCI Stock - MBMR / 5983 - 2010 Quarter 3

Market Cap : 242667667*3.07 = 744,989,737.69 (Medium)
NTA per share : (989292-11435)/245185 = 3.99
P/BV : 3.07/3.99 = 0.7694
Forecast P/E now : (3.07-0.08)/0.5036 = 5.94
ROE : 12.15% (Moderate)
DY : 0.08/3.07*100 = 2.61% (Low)
Fixed Asset Turnover(4 years) : (1.1567+0.9881+1.1029+1.0328)/4 = 1.0701 (High)
Liquidity Ratio : 470146/129346 = 3.6348 (High)
Receivables Collection Period : (104129+102091)/2/(1481187/365) = 25 days (Good)
My Target Price : 4.03+0.08 = 4.11 (EPS 0.5036, PE 8, DPS 0.08)
My Decision : BUY
My Comment : Revenue and profit lower down, good cash flow, strong cash, low debt, navps increasing, Yen strengthening, VW expansion, got new license from Lion Group
Technical Support Price : 3
Risk Rating : MODERATE
OSK Target Price : 5 (12 Nov 10)

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

- The Malaysian motor total industry volume (TIV) of sales by registration improved in the third quarter of 2010 marginally by 3.6% compared against the same period of 2009, however declined slightly by 1% over the preceding quarter

- Group revenue improved by 30.4%. Profit from operations improved by 65%, whilst share of results of associate companies improved by 35.6% to RM26.6 million. Net profit attributable to owners of the Company improved by 52%

- Group revenue declined by 4%. Similarly, profit from operations and share of results of associate companies were lower by 6.4% and 22.7% respectively. Net profit attributable to owners of the Company also declined by 11.4%

- The decline in truck sales under DMSB was due to the discontinuation of one of Daihatsu's truck models. This was partially offset by the commencement of the new Hino dealership that was secured earlier this year, alongside the sales of the GranMax pick‐up trucks

- Sales of passenger vehicles for all the brands under the Group improved over the same period last year due to the additional dealerships and new models

- Steel wheel deliveries moderated against the larger base last year and also affected by a shorter production period in the month of September 2010

- Estimate next 4Q eps after 2010 Q3 result announced = 0.1399*4*0.9 = 0.5036, estimate PE on current price 3.07 = 5.94(DPS 0.08)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.5049*0.9 = 0.4544, estimate highest/lowest PE = 7.22/6.45 (DPS 0.08)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.4772 (base on year 2008 eps), estimate highest/lowest PE = 6.71/5.53 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0931*4 = 0.3724, estimate highest/lowest PE = 8.4/6.69 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0916*4 = 0.3664, estimate highest/lowest PE = 7.21/6.39 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0568*4 = 0.2272, estimate highest/lowest PE = 10.65/8.98 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0381*4 = 0.1524, estimate highest/lowest PE = 14.37/12.6 (DPS 0.18)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.0672*4 = 0.2688, estimate highest/lowest PE = 8.59/6.58 (DPS 0.18)

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