Company Info
My Analysis
Research House
Accounting Ratio
My notes based on 2010 quarter 4 report (number in '000):-
- XL revenue grew in tandem with the increase in subscriber base of 28.1% as compared to Q4’09. Celcom revenue grew 1.1% driven by increase in total net additions of more than 100% and broadband subscribers of 67.7%. While Dialog revenue grew by 4.0% resulted from 15.0% increased in postpaid usage and 7.2% increase in revenue generating base subscribers
- The Group mobile revenue grew by 5.1% in the current quarter from Q4’09 mainly from strong data and VAS growth of 63.9% and 31.8% respectively
- The fluctuation of RM against local currencies had unfavourably affected the overall Group’s translated revenue. At constant currency using Q4’09 exchange rate, the Group revenue would have registered a higher growth of 9.9%
- The Group operating costs increased by 7.9% to RM2,286.9 million in Q4’10 from RM2,120.3 million in Q4’09, mainly driven by Celcom and XL. In Q4’10, Celcom recorded higher marketing cost and network related cost on leased line and site operating charges. XL recorded higher marketing costs during the current quarter due to new programs launched and higher commission expense. Increase in XL other operating costs in the current quarter is also due to higher interconnect and VAS cost in line with higher revenue
- Depreciation, amortisation and impairment in current quarter increased by RM982.6 million mainly resulted from the impairment on the investment in an associate
- The Group net finance costs was lower in current quarter at RM116.1 million as compared to RM155.5 million in Q4’09 as a result of repayment of debt and reduction of overall debt position at Group level
- The Group loss after tax was RM260.8 million, decreased by 143.3% from profit after tax (“PAT”) of RM602.4 million reported in Q4’09. This was mainly due to impairment recorded during the current quarter
- The Group other operating income increased by 65.3% to RM434.9 million for the financial year under review from RM263.1 million in the corresponding financial year mainly arising from net gain from the partial disposal of equity interest in XL
- For the financial year under review, the Group recorded foreign exchange loss of RM15.8 million as compared to the gains of RM587.2 million in the corresponding year, mainly arising from revaluation of USD borrowings and payables
- Estimate next 4Q eps after 2010 Q4 result announced = 0.072*4*1.05 = 0.3024, estimate PE on current price 4.8 = 15.54
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0752*4*1.05 = 0.3158, estimate highest/lowest PE = 16.12/13.93
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0681*4*1.05 = 0.286, estimate highest/lowest PE = 16.29/15.24
- Estimate next 4Q eps after 2010 Q1 result announced = 0.265(no adjustment due to higher profit is from non-repeatable income), estimate highest/lowest PE = 16.98/13.89
- Estimate next 4Q eps after 2009 Q4 result announced = 0.631(average recent 3 quarter)*4 = 0.2524+(0.05*0.2524) = 0.265(5% grow from 0.2524), estimate highest/lowest PE = 15.28/13.21
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0595*4 = 0.238, estimate highest/lowest PE = 14.71/12.61
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0579*4 = 0.2316, estimate highest/lowest PE = 14.12/12.52
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| Market Capital (Capital Size) | 40,536,741,384 (Very Large) |
| Par Value | RM 1.00 |
My Analysis
| Forecast P/E now | (4.8-0.1)/0.3024 = 15.54 (Moderate) |
| Target Price | 4.84+0.1 = 4.94 (PE 16.0, EPS 0.3024, DPS 0.1) |
| Decision | Not buy unless price below 4.7 |
| Comment | Revenue increased 2% to highest all the time and is consecutive quarter increase since FY09Q1 (higher than preceding year corresponding quarter 6.9%), eps decreased 157.4% and also lower than preceding year corresponding quarter 165.6%, cash generated from operating still not even enough to cover repayment of borrowings, and still got investing activities hence still will generate cash from financing activities, liquidity ratio increasing at low level now, gearing ratio increased at above moderate level now, high payables, weakening IDR against MYR, weakening USD against MYR |
| First Support Price | 4.6 |
| Second Support Price | 4.4 |
| Risk Rating | MODERATE |
Research House
| TA Target Price | 5.9 (2010-11-25) |
| JP Morgan Target Price | 5.9 (2010-12-09) |
| MIDF Target Price | 5.7 (2011-01-19) |
| RHB Target Price | 5.75 (2011-02-21) |
| CIMB Target Price | 5.9 (2011-02-24) |
| ECM Target Price | 6.08 (2011-02-24) |
| HLG Target Price | 5.32 (2011-02-24) |
| Maybank Target Price | 5.6 (2011-02-24) |
| OSK Target Price | 5.83 (2011-03-15) |
| HwangDBS Target Price | 5.6 (2011-03-23) |
| Credit Suisse Target Price | 6.1 (2011-03-30) |
| AMMB Target Price | 6.24 (2011-04-04) |
Accounting Ratio
| Return on Equity | 8.73% |
| Dividend Yield | 2.08% |
| Profit Margin | -0.67% |
| Tax Rate | - |
| Asset Turnover | 0.41 |
| Net Asset Value Per Share | 2.21 |
| Net Tangible Asset per share | 1.31 |
| Price/Net Tangible Asset Per Share | 3.78 |
| Cash Per Share | 0.74 |
| Liquidity Current Ratio | 1.3887 |
| Liquidity Quick Ratio | 1.3746 |
| Liquidity Cash Ratio | 1.0353 |
| Gearing Debt to Equity Ratio | 0.9518 |
| Gearing Debt to Asset Ratio | 0.4678 |
| Working capital per thousand Ringgit sale | 15.1% |
| Days to sell the inventory | 4 |
| Days to collect the receivables | 40 |
| Days to pay the payables | 236 |
My notes based on 2010 quarter 4 report (number in '000):-
- XL revenue grew in tandem with the increase in subscriber base of 28.1% as compared to Q4’09. Celcom revenue grew 1.1% driven by increase in total net additions of more than 100% and broadband subscribers of 67.7%. While Dialog revenue grew by 4.0% resulted from 15.0% increased in postpaid usage and 7.2% increase in revenue generating base subscribers
- The Group mobile revenue grew by 5.1% in the current quarter from Q4’09 mainly from strong data and VAS growth of 63.9% and 31.8% respectively
- The fluctuation of RM against local currencies had unfavourably affected the overall Group’s translated revenue. At constant currency using Q4’09 exchange rate, the Group revenue would have registered a higher growth of 9.9%
- The Group operating costs increased by 7.9% to RM2,286.9 million in Q4’10 from RM2,120.3 million in Q4’09, mainly driven by Celcom and XL. In Q4’10, Celcom recorded higher marketing cost and network related cost on leased line and site operating charges. XL recorded higher marketing costs during the current quarter due to new programs launched and higher commission expense. Increase in XL other operating costs in the current quarter is also due to higher interconnect and VAS cost in line with higher revenue
- Depreciation, amortisation and impairment in current quarter increased by RM982.6 million mainly resulted from the impairment on the investment in an associate
- The Group net finance costs was lower in current quarter at RM116.1 million as compared to RM155.5 million in Q4’09 as a result of repayment of debt and reduction of overall debt position at Group level
- The Group loss after tax was RM260.8 million, decreased by 143.3% from profit after tax (“PAT”) of RM602.4 million reported in Q4’09. This was mainly due to impairment recorded during the current quarter
- The Group other operating income increased by 65.3% to RM434.9 million for the financial year under review from RM263.1 million in the corresponding financial year mainly arising from net gain from the partial disposal of equity interest in XL
- For the financial year under review, the Group recorded foreign exchange loss of RM15.8 million as compared to the gains of RM587.2 million in the corresponding year, mainly arising from revaluation of USD borrowings and payables
- Estimate next 4Q eps after 2010 Q4 result announced = 0.072*4*1.05 = 0.3024, estimate PE on current price 4.8 = 15.54
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0752*4*1.05 = 0.3158, estimate highest/lowest PE = 16.12/13.93
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0681*4*1.05 = 0.286, estimate highest/lowest PE = 16.29/15.24
- Estimate next 4Q eps after 2010 Q1 result announced = 0.265(no adjustment due to higher profit is from non-repeatable income), estimate highest/lowest PE = 16.98/13.89
- Estimate next 4Q eps after 2009 Q4 result announced = 0.631(average recent 3 quarter)*4 = 0.2524+(0.05*0.2524) = 0.265(5% grow from 0.2524), estimate highest/lowest PE = 15.28/13.21
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0595*4 = 0.238, estimate highest/lowest PE = 14.71/12.61
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0579*4 = 0.2316, estimate highest/lowest PE = 14.12/12.52
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