KLCI Stock - ADVENTA / 7191 - 2011 Quarter 1

Company Info

Market Capital (Capital Size)	323,905,832 (Small)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(2.12-0.07)/0.1378 = 14.88 (High)
Target Price	1.24+0.07 = 1.31 (PE 9.0, EPS 0.1378, DPS 0.07)
Decision	Not interested unless USD currency strengthen more and latex price decrease more
Comment	Revenue increased 16.7% and is highest since FY09Q2(higher than preceding year corresponding quarter 38.6%), eps decreased 66.6% and also lower than preceding year corresponding quarter 57.9%, no cash generated from operating and cash generated from financing also not enough to cover all expenses, weakeaning liquidity ratio at low level now, higher gearing ratio at above moderate level now, working capital largely decreased, all accounting periods are good, USD currency rebound since historical low but still low, latex price slowly decrease but still at a high level now
First Support Price	2.1
Second Support Price	1.9
Risk Rating	HIGH

Research House

RHB Target Price	2.21 (2010-12-23)
CIMB Target Price	3.14 (2010-12-29)
OSK Target Price	3.04 (2011-04-01)

Accounting Ratio

Return on Equity	14.13%
Dividend Yield	3.30%
Profit Margin	3.24%
Tax Rate	-
Asset Turnover	0.86
Net Asset Value Per Share	1.42
Net Tangible Asset per share	1.4
Price/Net Tangible Asset Per Share	1.71
Cash Per Share	0.19
Liquidity Current Ratio	1.0132
Liquidity Quick Ratio	0.5896
Liquidity Cash Ratio	0.1698
Gearing Debt to Equity Ratio	0.9574
Gearing Debt to Asset Ratio	0.4881
Working capital per thousand Ringgit sale	0.6%
Days to sell the inventory	81
Days to collect the receivables	73
Days to pay the payables	53

My notes based on 2011 quarter 1 report (number in '000):-
- Revenue for the quarter at RM106 million is a 39% improvement over corresponding quarter last financial year as a result of encouraging results from sales in growth markets and consistent revenue from mature markets. Operating profit dipped 66% due to historical high material cost and the price adjustment lag based on previous month/previous quarter cost index

- The quarter’s revenue increased 17% and earnings fell 19% over preceding quarter. The weakening dollar reduced Ringgit income by 1.5% in the comparison quarter. Latex in Q4 2010 was averaged at RM7.22 / kg and in this quarter Q1 2011, the average is RM 9.28 / kg an increase of 28.5 %. Until we see latex price topping out or remaining stable, we expect to lag in earnings

- Estimate next 4Q eps after 2010 Q1 result announced = 0.0265*4*1.3 = 0.1378(slowly recover), estimate PE on current price 2.12 = 14.88(DPS 0.07)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.04*4 = 0.16, estimate highest/lowest PE = 17.38/12.44 (DPS 0.07)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.055*4*0.95 = 0.209, estimate highest/lowest PE = 12.39/8.71 (DPS 0.07)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0434*4 = 0.1736*1.1(QbQ improvement adjustment) = 0.191, estimate highest/lowest PE = 16.81/11.78 (DPS 0.07)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.063*4 = 0.252, estimate highest/lowest PE = 15.36/11.35 (DPS 0.07)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0372*4 = 0.1488, estimate highest/lowest PE = 28.83/18.28 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0319*4 = 0.1276, estimate highest/lowest PE = 23.2/11.36 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0272*4 = 0.1088, estimate highest/lowest PE = 19.39/7.77 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0232*4 = 0.092, estimate highest/lowest PE = 13.04/8.26 (DPS 0.06)

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