KLCI Stock - MISC / 3816 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	37,049,482,754 (Very Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(8.3-0.35)/0.2764 = 28.76 (High)
Target Price	4.42+0.35 = 4.77 (PE 16.0, EPS 0.2764, DPS 0.35)
Decision	NOT BUY
Comment	Revenue second consecutive quarter decreasing and also lower than preceding year corresponding quarter, eps decreased but higher than preceding year corresponding quarter, neither got free nor positive net cash flow, cash decreased 67.7%, liquidity ratio largely decreased at low level now, above moderate gearing ratio, all accounting period as usual
First Support Price	8.2
Second Support Price	8.2
Risk Rating	HIGH

Research House

MIDF Target Price	9 (2010-11-25)
RHB Target Price	8.14 (2010-11-25)
S&P Target Price	9 (2010-11-26)
HwangDBS Target Price	8.9 (2010-12-10)
CIMB Target Price	7 (2010-12-16)

Accounting Ratio

Return on Equity	5.28%
Dividend Yield	4.22%
Profit Margin	13.49%
Tax Rate	2.20%
Asset Turnover	0.3372
Net Asset Value Per Share	4.91
Net Tangible Asset per share	4.71
Price/Net Tangible Asset Per Share	1.83
Cash Per Share	0.55
Liquidity Current Ratio	1.034
Liquidity Quick Ratio	0.9653
Liquidity Cash Ratio	0.5282
Gearing Debt to Equity Ratio	0.7032
Gearing Debt to Asset Ratio	0.409
Working capital per thousand Ringgit sale	1.3%
Days to sell the inventory	10
Days to collect the receivables	59
Days to pay the payables	107

My notes based on 2011 quarter 2 report (number in '000):-
- The Group profit before taxation of RM416.3 million was 159.2% higher than the corresponding quarter's profit of RM160.6 million. The increase was mainly from improved performance in the restructured Liner business and increased profitability in Heavy Engineering business

- The Group profit before taxation of RM416.3 million was 11.7% lower than the RM471.3 million recorded in the preceding quarter. The lower profit achieved were mainly due to higher losses from Chemical business and Petroleum business recording nominal loss in this quarter

- Estimate next 4Q eps after 2011 Q2 result announced = 0.0691*4 = 0.2764(profit margin 10% per quarter), estimate PE on current price 8.3 = 28.76(DPS 0.35)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.04(exclude 257 million from other income)*4*1.05 = 0.168, estimate highest/lowest PE = 52.08/48.63 (DPS 0.35)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0509*4 = 0.2036, estimate highest/lowest PE = 42.98/37.77 (DPS 0.35)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0457*4 = 0.1828, estimate highest/lowest PE = 48.03/40.65 (DPS 0.35)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0457*4 = 0.1828, estimate highest/lowest PE = 47.37/40.59 (DPS 0.35)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0544*4 = 0.2176, estimate highest/lowest PE = 42/37.91 (DPS 0.35)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.058*4 = 0.232, estimate highest/lowest PE = 37.07/33.62 (DPS 0.35)

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