KLCI Stock - SUNWAY / 4308 - 2010 Quarter 3

Company Info

Market Capital (Capital Size)	1,407,543,431 (Large)
Par Value	RM 1.00

My Analysis 

Forecast P/E now	(2.32-0.02)/0.1972 = 11.66 (Moderate)
Target Price	2.37+0.02 = 2.39 (PE 12.0, EPS 0.1972, DPS 0.02)
Decision	NOT BUY unless price below 2.2
Comment	Revenue decreased but still higher than preceding year corresponding quarter, eps same with revenue, free and net cash flow increasing, liquidity ratio decreasing to low level now, gearing ratio decreasing but still high level now, all accounting period are as usual compared to historical quarter, merges offer RM2.6 ps with SunCity
First Support Price	2.2
Second Support Price	2.0
Risk Rating	MODERATE

Research House

ECM Target Price	2.6 (2011-01-04)
OSK Target Price	2.6 (2011-01-04)

Accounting Ratio 

Return on Equity	16.66%
Dividend Yield	0.97%
Profit Margin	12.48%
Tax Rate	15.40%
Asset Turnover	0.7796
Net Asset Value Per Share	1.43
Net Tangible Asset per share	1.23
Price/Net Tangible Asset Per Share	1.8
Cash Per Share	0.46
Liquidity Current Ratio	1.1125
Liquidity Quick Ratio	0.8071
Liquidity Cash Ratio	0.2324
Gearing Debt to Equity Ratio	1.5841
Gearing Debt to Asset Ratio	0.5893
Working capital per thousand Ringgit sale	7.5%
Days to sell the inventory	78
Days to collect the receivables	133
Days to pay the payables	151

My notes based on 2010 quarter 3 report (number in '000):-
- The Group recorded revenue of RM489.0 million and profit before taxation of RM61.0 million during the quarter under review. These results include RM4.9 million gains arising from the adoption of FRS 139

- The Group’s operating results continues to be driven by the construction, property development and trading and manufacturing divisions

- The Group recorded revenue and profit before taxation of RM489.0 million and RM61.0 million respectively during the current quarter as compared to revenue of RM509.2 million and profit before taxation of RM59.2 million in the immediate preceding quarter

- The results of the current quarter showed a slight improvement despite a drop in revenue mainly due to higher contribution from the construction division

- Estimate next 4Q eps after 2010 Q3 result announced = 0.065*4 = 0.26, estimate PE on current price 2.31 = 8.81(DPS 0.02)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.058*0.85*4 = 0.1972(15% deduction adjustment due to segments result 20% lower than preceding quarter), estimate highest/lowest PE = 11.56/7.86 (DPS 0.02)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.058(exclude FRS 139)*4*1.1 = 0.2552(10% QbQ improvement adjustment), estimate highest/lowest PE = 6.54/5.09 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q6 result announced = 0.041*4*1.1 = 0.1804, estimate highest/lowest PE = 9.48/7.1 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q5 result announced = 0.0318*4 = 0.1272, estimate highest/lowest PE = 11.95/8.88 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0352*4*1.1 = 0.1549, estimate highest/lowest PE = 9.36/8.26 (DPS 0.03)

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