KLCI Stock - TDM / 2054 - 2010 Quarter 3

Company Info

Market Capital (Capital Size)	698,538,522 (Medium)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(3.18-0.13)/0.4 = 7.62 (Moderate)
Target Price	3.20+0.13 = 3.33 (PE 8.0, EPS 0.4, DPS 0.13)
Decision	BUY
Comment	Revenue increased and higher than preceding year corresponding quarter, eps same with revenue, free cash flow and net cash flow increased, strong cash, better liquidity ratio but still at low level, gearing ratio decreasing at low level now, all accounting period improving, monthly production decreased but still high, cpo price increasing
First Support Price	2.35
Second Support Price	2.1
Risk Rating	MODERATE

Accounting Ratio

Return on Equity	12.07%
Dividend Yield	4.09%
Profit Margin	33.39%
Tax Rate	21.62%
Asset Turnover	0.4375
Net Asset Value Per Share	3.03
Net Tangible Asset per share	3.02
Price/Net Tangible Asset Per Share	0.8
Cash Per Share	0.55
Liquidity Current Ratio	1.6415
Liquidity Quick Ratio	1.4892
Liquidity Cash Ratio	0.8511
Gearing Debt to Equity Ratio	0.2805
Gearing Debt to Asset Ratio	0.2145
Working capital per thousand Ringgit sale	24.0%
Days to sell the inventory	29
Days to collect the receivables	87
Days to pay the payables	188

My notes based on 2010 quarter 3 report (number in '000):-
- For the current quarter, the Group recorded an increase of 16% in revenue to RM110.1 million from RM95.3 million reported in the previous corresponding quarter. Group revenue for the nine months period ended 30 September 2010 was RM285.3 million compared with RM238.1 million recorded in the same period last year

- The Group posted a profit before taxation of RM36.8 million as compared to RM28.1 million in the previous corresponding quarter. For the nine months period ended 30 September 2010, profit before taxation was RM80.5 million compared with RM47.2 million registered in the same period last year

- For the quarter ended 30 September 2010, our Plantation Division recorded higher revenue by 23% as compared to the same period last year due to higher FFB production by 7% and higher average CPO prices by 8%

- Healthcare Division continues to register double digit revenue and profit growth. For the quarter ended 30 September 2010, the division recorded an increase in revenue and profit before tax by 12% and 18% respectively. This is contributed by the increased in patient number by 5% as compared to the same period last year

- Food Division recorded losses of RM0.4 million for the nine months ended 30 September 2010 due to lower average prices achieved as a result of weakened demand for process birds

- The Group recorded a profit before taxation of RM36.8 million for the current quarter, which represents an increased of RM19.9 million over profit before tax of RM16.9 million for the preceding quarter ended 30 June 2010 mainly due to higher FFB production by 49% and higher average CPO price by 2%

- Estimate next 4Q eps after 2010 Q3 result announced = 0.4, estimate PE on current price 3.18 = 7.62(DPS 0.13)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0933*4 = 0.3732(0.0933 is average of eps in FY10Q1 and FY09Q4), estimate highest/lowest PE = 6.54/4.82 (DPS 0.13)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0889*4 = 0.3556, estimate highest/lowest PE = 6.52/4.16 (DPS 0.13)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.2503*1.2 = 0.3004, estimate highest/lowest PE = 6.23/5.13 (DPS 0.13)
- Estimate next 4Q eps after 2009 Q3 result announced = (0.0923+0.0418+0.019)/3*4*1.2 = 0.245, estimate highest/lowest PE = 6.37/5.51 (DPS 0.14)

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