KLCI Stock - TSH / 9059 - 2010 Quarter 3

Par Value: 0.50
Market Cap : 414530263*2.6 = 1,077,778,683.80 (Large)
NTA per share : (728207-49442)/411055 = 1.65
P/BV : 2.6/1.65 = 1.5758
Forecast P/E now : (2.6-0.05)/0.1954 = 13.05 (Moderate)
ROE : 7.73% (Low)
DY : 0.05/2.6*100 = 1.92% (Low)
Fixed Asset Turnover(4 years) : (0.5319+0.5427+0.8155+0.7126)/4 = 0.6507 (Low)
Liquidity Ratio : 414847/525904 = 0.7888 (Weak)
Receivables Collection Period : (144448+159781)/2/(954513/365) = 58 days (Acceptable)
My Target Price : 2.34+0.05 = 2.39 (PE 12, EPS 0.1954, EPS 0.05)
My Decision : NOT BUY unless price below 2.3
My Comment : Revenue and profit increased, receivables increased, strong cash, high debt and increasing, navps decreased, monthly production remain low, palm oil land increased, USD and EUR against MYR lower than preceding quarter, CPO price increasing
Technical Support Price : 2.2, 2
Risk Rating : MODERATE

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

- For the current quarter, the Group recorded an increase of 5.2% in revenue as compared to the previous corresponding quarter

- The Group posted a 0.7% higher profit before taxation as compared to the previous corresponding quarter

- The Palm and Bio-Integration business segment’s performance improved as a result of higher CPO prices and better FFB yield per Ha. The Cocoa Manufacturing segment also reported a better result due to improved margin. The Wood Products segment continues to be affected by its competitive environment and given the bulk of the revenue are export orientated, it was affected by the strong Ringgit Malaysia against the foreign currencies

- The Group’s revenue for the quarter under review was 3.3% higher than the immediate preceding quarter

- As mentioned above, the results under Palm and Bio-Integration segment is favourable owing to higher CPO prices and better FFB yield. The Wood Products segment also recorded higher revenue against previous quarter due to strengthening of Euro denominated sale. This segment registered a marginal profit due to contribution from forestry operation. The results of Cocoa Manufacturing segment also improved albeit with lower revenue

- Estimate next 4Q eps after 2010 Q3 result announced = 0.0444*4*1.1 = 0.1954, estimate PE on current price 2.6 = 13.05(DPS 0.05)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.033*4 = 0.132, estimate highest/lowest PE = 21.21/13.94 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.1938*0.95 = 0.1841, estimate highest/lowest PE = 10.59/8.8 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.1802*1.1 = 0.1982, estimate highest/lowest PE = 10.65/8.78 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0568*4*0.95 = 0.2158, estimate highest/lowest PE = 10.66/7.92 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.055*4*0.8 = 0.176, estimate highest/lowest PE = 10.97/8.35 (DPS 0.05)

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