KLCI Stock - GAB / 3255 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	2,972,644,320 (Large)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(9.84-0.45)/0.5832 = 16.10 (High)
Target Price	9.33+0.45 = 9.78 (PE 16.0, EPS 0.5832, DPS 0.45)
Decision	Not interested when high commodity price
Comment	Revenue increased 14.9% and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 11.4%, eps increased 67.1% and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 47.6%, negative free cash flow decreased but negative net cash flow increasing, liquidity ratio decreased at moderate level now, gearing ratio increasing to moderate level now, all accounting periods are good, higher commodity price going to impact the cost
First Support Price	9.15
Second Support Price	8.3
Risk Rating	MODERATE

Research House

OSK Target Price	9.97 (2011-01-25)
AMMB Target Price	9.04 (2011-01-31)
TA Target Price	9.95 (2011-01-31)
Maybank Target Price	10.6 (2011-02-21)
UOB Target Price	10.3 (2011-02-21)

Accounting Ratio

Return on Equity	39.60%
Dividend Yield	4.57%
Profit Margin	20.45%
Tax Rate	25.01%
Asset Turnover	2.0335
Net Asset Value Per Share	1.55
Net Tangible Asset per share	1.52
Price/Net Tangible Asset Per Share	6.34
Cash Per Share	0.16
Liquidity Current Ratio	2.195
Liquidity Quick Ratio	1.7872
Liquidity Cash Ratio	0.2191
Gearing Debt to Equity Ratio	0.54
Gearing Debt to Asset Ratio	0.3506
Working capital per thousand Ringgit sale	18.0%
Days to sell the inventory	27
Days to collect the receivables	86
Days to pay the payables	56

My notes based on 2011 quarter 2 report (number in '000):-
- Group revenue for the second quarter ended 31 December 2010 increased by RM43.3 million or 11.4% compared to the corresponding quarter in the previous financial year

- Group profit before tax for the same quarter was higher at RM86.2 million or 46.9% compared to RM58.7 million in the corresponding quarter of the financial year 2010

- Group revenue for the quarter under review was higher by RM54.8 million or 14.9% compared to RM366.6 million recorded for the preceding quarter

- Profit before tax for the Group for the same quarter was higher by RM34.6 million or 66.9% compared to the preceding quarter

- This favourable performance is due to higher sales in anticipation of Chinese New Year, the write-back of some costs over accrued and a further improvement in the Group’s market performance

- Estimate next 4Q eps after 2011 Q2 result announced = 0.6139*0.95 = 0.5832, estimate PE on current price 9.84 = 16.1(DPS 0.45)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.545, estimate highest/lowest PE = 19.36/15.32 (DPS 0.45)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.5054*1.05 = 0.5307 (5% grow from 0.5054, due to next year no more world cup), estimate highest/lowest PE = 15.81/14.23 (DPS 0.45)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.517 (10% grow from 0.47), estimate highest/lowest PE = 14.99/12.55 (DPS 0.41)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.517, estimate highest/lowest PE = 13.17/12.13 (DPS 0.41)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.47, estimate highest/lowest PE = 15.23/13.17 (DPS 0.41)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.47, estimate highest/lowest PE = 15.47/12.9.6 (DPS 0.41)

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