KLCI Stock - DAYANG / 5141 - 2010 Quarter 4

Company Info

Market Capital (Capital Size)	1,127,500,000 (Large)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(2.05-0.05)/0.1434 = 13.95 (High)
Target Price	1.72+0.05 = 1.77 (PE 12.0, EPS 0.1434, DPS 0.05)
Decision	Not interested unless marine charter division revenue and profit increase more
Comment	Revenue increased 14.8% and is fourth consecutive quarter increasing, eps decreased 20.8% but higher than preceding year corresponding quarter 178.1%, both positive free and net cash flow increased, liquidity ratio increased at high level now, gearing ratio increased at below moderate level now, receivables period high but offset by higher working capital, marine charter division profit decreased
First Support Price	1.9
Second Support Price	1.7
Risk Rating	MODERATE

Research House

RHB Target Price	2.6 (2011-02-09)
ECM Target Price	2.04 (2011-02-11)
HwangDBS Target Price	2.7 (2011-02-11)

Accounting Ratio

Return on Equity	18.23%
Dividend Yield	2.44%
Profit Margin	26.56%
Tax Rate	18.81%
Asset Turnover	0.4672
Net Asset Value Per Share	1.06
Net Tangible Asset per share	1.06
Price/Net Tangible Asset Per Share	1.97
Cash Per Share	0.58
Liquidity Current Ratio	3.7887
Liquidity Quick Ratio	3.7738
Liquidity Cash Ratio	2.3409
Gearing Debt to Equity Ratio	0.4642
Gearing Debt to Asset Ratio	0.317
Working capital per thousand Ringgit sale	95.2%
Days to sell the inventory	3
Days to collect the receivables	176
Days to pay the payables	118

My notes based on 2010 quarter 4 report (number in '000):-
- Comparatively, the Group’s revenue for the current quarter ended 31 December 2010 increased by 111% while profit before tax (excluding share of results of an associate) and total comprehensive income for the current quarter increased by 266% and 178% respectively, when compared to the quarter ended 31 December 2009. The higher revenue in the current quarter as compared to the corresponding quarter is mainly due to higher value of work orders received and performed in the current quarter

- Whilst revenue increased by RM43.8 million ie 111%, profit before tax (excluding share of results of an associate) for the current quarter increased by RM15.7 million ie. 266% in view of the fact that the work orders in the current quarter have a higher profit margin contribution

- The Group’s associate, Syarikat Borcos Shipping Sdn Bhd, contributed a profit of approximately RM0.5 million, further increasing the group’s total profit before tax for the current quarter by 274%

- In the current quarter, the Group’s revenue was 15% higher, the profit before tax (excluding share of results of an associate) was 12% lower and the total comprehensive income was 21% lower compared to the preceding quarter

- The higher revenue of RM83.1 million for the current quarter as compared to RM72.4 million for the preceding quarter is mainly due to higher work orders received and performed in the current quarter

- Whilst revenue increased by RM10.7 million ie. 15%, profit before tax decreased by RM3.1 million ie. 12% in view of the fact that the work orders in the current quarter have a lower profit margin contribution as compared to those of the preceding quarter

- The associate, Syarikat Borcos Shipping Sdn Bhd contributed a profit of approximately RM0.5 million ie a decrease of 73% from the preceding quarter. The Group took into account the share of results of the associate up to November 2010 and recognised it as an asset held for sale in December 2010, as the Company had on 8 December 2010 entered into a share sale agreement to dispose of the investment in the associate

- Estimate next 4Q eps after 2010 Q4 result announced = 0.0326(17927/550000)*4*1.1 = 0.1434, estimate PE on current price 2.05 = 13.95(DPS 0.05)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0526*4*1.1 = 0.2314, estimate highest/lowest PE = 13.22/12.14 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1239*1.1 = 0.1363 (0.1239 is recent 4Q cum_eps), estimate highest/lowest PE = 21.94/14.16 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.129/4(average eps from recent 4Q)*0.9 = 0.1161 (10% drop year-to-year), estimate highest/lowest PE = 16.67/12.79 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.1237*0.9 = 0.1113(10% drop year-to-year), estimate highest/lowest PE = 19.14/14.82 (DPS 0.05, correction to last Q estimated)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1246, estimate highest/lowest PE = 16.21/9.71 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.1548, estimate highest/lowest PE = 8.98/6.91 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.1338, estimate highest/lowest PE = 8.67/3.73 (DPS 0.14)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.15, estimate highest/lowest PE = 7.87/ (DPS 0.14)

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