KLCI Stock - DRBHCOM / 1619 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	3,615,153,285 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(1.87-0.045)/0.1824 = 10.01 (High)
Target Price	1.82+0.045 = 1.87 (PE 10.0, EPS 0.1824, DPS 0.045)
Decision	NOT BUY unless price below 1.5
Comment	Revenue decreased but higher than preceding year corresponding quarter, eps same with revenue, negative free cash flow and negative net cash flow increased, profit margin decreasing
First Support Price	1.75
Second Support Price	1.25
Risk Rating	MODERATE

Research House

HwangDBS Target Price

3.55 (2011-02-28)

Accounting Ratio

Return on Equity	11.07%
Dividend Yield	2.41%
Profit Margin	9.80%
Tax Rate	20.76%
Asset Turnover	0.25
Net Asset Value Per Share	2.54
Net Tangible Asset per share	2.43
Price/Net Tangible Asset Per Share	0.81
Cash Per Share	3.84
Liquidity Current Ratio	0.7646
Liquidity Quick Ratio	0.622
Liquidity Cash Ratio	0.5183
Gearing Debt to Equity Ratio	3.973
Gearing Debt to Asset Ratio	0.7636
Working capital per thousand Ringgit sale	-52.7%
Days to sell the inventory	122
Days to collect the receivables	84
Days to pay the payables	816

My notes based on 2011 quarter 3 report (number in '000):-
- The Group’s revenue for the nine months ended 31 December 2010 increased to RM4.81 billion compared to RM4.72 billion in the previous corresponding period ended 31 December 2009

- The Group registered a higher pre-tax profit of RM566.93 million for the nine months ended 31 December 2010 compared to RM339.11 million in the previous corresponding period ended 31 December 2009. The increase in profits were attributed to the better performance of operating companies of the Group and the recognition of negative goodwill arising from accretion of equity interest in Edaran Otomobil National Berhad (EON) from 79.05% to 100.0%

- The Group recorded a pre-tax profit of RM157.28 million in the current quarter ended 31 December 2010 as compared to RM186.17 million in the preceding quarter ended 30 September 2010. The reduction was mainly due to lower results from certain subsidiary companies, share of results of jointly controlled entities and associated companies in the current quarter under review

- Estimate next 4Q eps after 2011 Q2 result announced = 0.057*4*0.8 = 0.1824, estimate PE on current price 1.87 = 5.76(DPS 0.045)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.0684*4*0.8 = 0.2189, estimate highest/lowest PE = 10.19/5.57 (DPS 0.04)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.1873*0.95 = 0.1779, estimate highest/lowest PE = 7.59/5.79 (DPS 0.04)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0493*4*0.95 = 0.1873, estimate highest/lowest PE = 6.09/5.02 (DPS 0.04)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0428*4 = 0.1712, estimate highest/lowest PE = 7.42/5.37 (DPS 0.04)

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