KLCI Stock - HSL / 6238 - 2010 Quarter 3

Company Info

Market Capital (Capital Size)	1,037,163,280 (Large)
Par Value	RM 0.20

My Analysis

Forecast P/E now	(1.78-0.026)/0.1533 = 11.44 (Moderate)
Target Price	2.15+0.026 = 2.17 (PE 14.0, EPS 0.1533, DPS 0.026)
Decision	BUY
Comment	Revenue second consecutive quarter largely increasing and is highest all the time, eps second consecutive quarter increasing and also higher than preceding year corresponding quarter, free cash flow increasing but positive net cash flow decreased, liquidity ratio decreasing at low level now, moderate gearing ratio, receivables and payables period are high
First Support Price	1.72
Second Support Price	1.55
Risk Rating	MODERATE

Research House

OSK Target Price	2.32 (2011-01-17)
Maybank Target Price	2.3 (2011-01-25)

Accounting Ratio

Return on Equity	21.81%
Dividend Yield	1.24%
Profit Margin	20.31%
Tax Rate	25.64%
Asset Turnover	0.8176
Net Asset Value Per Share	0.6
Net Tangible Asset per share	0.6
Price/Net Tangible Asset Per Share	3.2
Cash Per Share	0.15
Liquidity Current Ratio	1.7542
Liquidity Quick Ratio	1.5612
Liquidity Cash Ratio	0.382
Gearing Debt to Equity Ratio	0.6807
Gearing Debt to Asset Ratio	0.4049
Working capital per thousand Ringgit sale	35.3%
Days to sell the inventory	41
Days to collect the receivables	201
Days to pay the payables	206

My notes based on 2010 quarter 3 report (number in '000):-
- The Group’s revenue for the quarter under review is RM134.35 million against the preceding year corresponding quarter’s figure of RM101.73 million. Net profit before tax of the Group for the current quarter is RM27.28 million as compared to RM20.67 million for the preceding year’s corresponding quarter

- The net profit before tax of the Group for the current quarter is RM27.28 million compared to RM23.98 million for the immediate preceding quarter on the back of the Group’s revenue of RM134.35 million and RM111.26 million respectively

- Estimate next 4Q eps after 2010 Q3 result announced = 0.0697*2*1.1 = 0.1533, estimate PE on current price 1.78 = 11.44(DPS 0.026)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0574*2*1.1 = 0.1263, estimate highest/lowest PE = 15.08/11.99 (DPS 0.026)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.1025*1.1 = 0.1128, estimate highest/lowest PE = 14.95/11.49 (DPS 0.024)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.1025*1.1 = 0.1128, estimate highest/lowest PE = 13.88/11.05 (DPS 0.024)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0281*4 = 0.1124, estimate highest/lowest PE = 11.96/8.75 (DPS 0.016)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0233*4 = 0.0932, estimate highest/lowest PE = 13.13/9.7 (DPS 0.016)

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