KLCI Stock - KGB / 0151 - 2010 Quarter 3

Company Info 

Market Capital (Capital Size)	50,429,250 (Very Small)
Par Value	RM 0.10

My Analysis 

Forecast P/E now	(0.675-0.03)/0.095 = 6.79 (Moderate)
Target Price	0.76+0.03 = 0.79 (PE 8.0, EPS 0.095, DPS 0.03)
Decision	BUY
Comment	Revenue second consecutive quarter increasing and is historical highest, eps second consecutive quarter increasing but still lower than preceding year corresponding quarter, still no free cash flow and negative net cash flow, cash decreased but still strong, liquidity ratio decreased at moderate level now, gearing ratio increased at moderate level now, all accounting period are increased but still acceptable compared to historical quarter
First Support Price	0.665
Second Support Price	0.665
Risk Rating	MODERATE

Research House

Kenanga Target Price

1.04 (2010-09-07)

Accounting Ratio 

Return on Equity	19.26%
Dividend Yield	4.44%
Profit Margin	10.83%
Tax Rate	8.73%
Asset Turnover	1.1667
Net Asset Value Per Share	0.49
Net Tangible Asset per share	0.49
Price/Net Tangible Asset Per Share	1.43
Cash Per Share	0.31
Liquidity Current Ratio	2.2704
Liquidity Quick Ratio	2.2387
Liquidity Cash Ratio	0.9417
Gearing Debt to Equity Ratio	0.6893
Gearing Debt to Asset Ratio	0.408
Working capital per thousand Ringgit sale	42.4%
Days to sell the inventory	4
Days to collect the receivables	158
Days to pay the payables	105

My notes based on 2010 quarter 3 report (number in '000):-
- The Group recorded a 29% higher revenue as compared to previous corresponding quarter in 2009 mainly due to the higher revenue contribution from Taiwan and China operations. However, the lower Gross Profit margin of the current quarter mainly due to projects with lower margins

- The Group recorded higher revenue and pbt as compared to the preceding quarter

- Estimate next 4Q eps after 2010 Q3 result announced = 0.095, estimate PE on current price 0.675 = 7.74(DPS 0.03)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.095, estimate highest/lowest PE = 8.63/7.05 (DPS 0.03)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.03*3+0.01 = 0.1, estimate highest/lowest PE = 9.6/6.6 (DPS 0.03)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.03*3+0.01 = 0.1, estimate PE on current price 0.77 = 7.4(DPS 0.03)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.1, estimate highest/lowest PE = 7.7/6.65 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1, estimate highest/lowest PE = 9/5.8

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