KLCI Stock - EKSONS / 9016 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	193,771,340 (Small)
Par Value	RM 0.80

My Analysis

Forecast P/E now	(1.18-0.05)/0.1336 = 8.46 (Moderate)
Target Price	1.20+0.05 = 1.25 (PE 9.0, EPS 0.1336, DPS 0.05)
Decision	NOT BUY unless price below 1.1
Comment	Revenue largely increased and also higher than preceding year corresponding quarter, eps decreasing and also lower than preceding year corresponding quarter, free and net cash flow increasing, liquidity ratio decreasing but still at high level now, gearing ratio decreasing at low level now, inventory turnover and payables period increasing, weakening USD against MYR, higher log costs, property division growing
First Support Price	0.98
Second Support Price	0.94
Risk Rating	MODERATE

Accounting Ratio

Return on Equity	9.34%
Dividend Yield	2.54%
Profit Margin	6.40%
Tax Rate	-
Asset Turnover	0.6846
Net Asset Value Per Share	2.19
Net Tangible Asset per share	2.03
Price/Net Tangible Asset Per Share	0.51
Cash Per Share	0.39
Liquidity Current Ratio	3.0287
Liquidity Quick Ratio	1.2699
Liquidity Cash Ratio	0.7495
Gearing Debt to Equity Ratio	0.235
Gearing Debt to Asset Ratio	0.1814
Working capital per thousand Ringgit sale	53.8%
Days to sell the inventory	183
Days to collect the receivables	45
Days to pay the payables	52

My notes based on 2011 quarter 2 report (number in '000):-
- The Group’s revenue for the quarter under review included for the first time, contribution from the sale of shop offices of the Group’s property development subsidiary, The Atmosphere Sdn Bhd

- For the quarter under review, the Group recorded a turnover of RM93.0 million. Profit after taxation is at RM10.2 million. The turnover and profit after taxation for the corresponding quarter of the previous financial year were RM64.6 million and RM7.5 million respectively

- The Group’s turnover for the current financial year to date and the corresponding period of the previous financial year is at RM163.2 million and RM1229 million respectively. The Group’s profit after taxation for the current financial year to date and the corresponding period of the preceding financial year are at RM18.9 milion and RM8.9 million respectively

- The timber division’s turnover for the half-year ended 30 September 2010, is at RM156.0 million compared to RM122.8 million achieved for the same period of the preceding financial year. Profit after taxation for the half-year ended 30 September 2010, which is at RM14.6 million, is higher than the preceding year’s corresponding period of RM13.4million

- The division’s turnover for the quarter under review came in higher than that of the comparative quarter of the preceding financial year. Turnover for the quarter is at RM85.9 million compared to RM64.6 million previously. However, the division’s profit after taxation for the quarter under review is lower at RM4.7 million compared to RM9.8 million in the same quarter of the previous financial year

- The lower profit margin for the quarter under review was mainly due to higher log costs and the effects of a weaker US Dollar. The price of plywood, which is mainly traded in US Dollars, did not move to mitigate the effects of the weaker US Dollar

- At Property division, construction works at the division’s project in Seri Kembangan which is at full swing now, has reported its maiden turnover from its sale of shop offices. The division recorded a turnover of RM7.2 million for the quarter under review. Profit after taxation for the quarter under review is at RM5.5 million. In the corresponding quarter of the preceding financial year the division recorded a loss of RM2.3 million

- The division’s profit after taxation for the first 6 months of the current financial year is at RM4.2 million compared to a loss of RM4.6 million for the same period of the preceding financial year

- During the quarter under review, the Group’s development project, The Atmosphere, was awarded a provisional Green Mark certificate in recognition of the project’s environmentally friendly features

- The Group‘s turnover and profit after taxation for the quarter under review are RM93.0 million and RM10.2 million respectively. The Group’s turnover and profit after taxation for the immediate preceding quarter were RM70.2 million and RM8.7 million respectively

- The timber division’s turnover for the quarter under review and immediate preceding quarter are RM85.9 million and RM70.2 million respectively. The profit after taxation for the quarter under review is lower than that of the immediate preceding quarter. The division recorded a profit after taxation of RM4.7 million for the quarter under review compared to RM9.9 million for the immediate preceding quarter

- Profit margins for the quarter under review were squeezed by higher log prices and depreciation of the US Dollar

- During the quarter under review, the property development division recorded a turnover of RM7.2 million from the sale of shop offices. Prior to the current quarter, no sales of shop offices was recognized as construction works had only commenced in the later half of the immediate preceding quarter

- Profit after taxation for the quarter under review is RM5.6 million. In the immediate preceding quarter the division had a loss of RM1.3 million

- Estimate next 4Q eps after 2011 Q2 result announced = 0.0334*4 = 0.1336(use profit margin 6% from 93k revenue), estimate PE on current price 1.18 = 8.46(DPS 0.05)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0342*4 = 0.1368(use profit margin 8% from 70k revenue), estimate highest/lowest PE = 8.04/6.51 (DPS 0.05) (Amendment)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.11*0.9 = 0.099(0.11 is year 2010 cum_eps excluded 9.9 million and 10% negative adjustment for those tax refund), estimate highest/lowest PE = 8.18/7 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.11, estimate highest/lowest PE = 9.82/7.36 (DPS 0.02)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1, estimate highest/lowest PE = 8.95/7.5 (DPS 0.02)

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