KLCI Stock - KNM / 7164 - 2010 Quarter 4

Company Info

Market Capital (Capital Size)	2,582,818,889 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(2.58-0.03)/0.1441 = 17.70 (High)
Target Price	2.02+0.03 = 2.05 (PE 14.0, EPS 0.1441, DPS 0.03)
Decision	Not interested unless revenue and profit increase more
Comment	Revenue decreased 8.2% and also lower than preceding year corresponding quarter 7.8%, eps decreased 70.4% and also lower than preceding year corresponding quarter 71%, cash generated from operating is not enough to cover financing nor investing activities, liquidity ratio decreasing at low level now, gearing ratio decreasing at high level now, all accounting periods remain long term but working capital largely reducing
First Support Price	2.3
Second Support Price	1.9
Risk Rating	HIGH

Research House

ECM Target Price	3.43 (2011-02-24)
Maybank Target Price	4.35 (2011-02-24)
AMMB Target Price	3.25 (2011-03-04)
MIDF Target Price	3.2 (2011-03-04)
RHB Target Price	3.45 (2011-03-04)
TA Target Price	4.8 (2011-03-04)
HwangDBS Target Price	3.5 (2011-03-08)
Kenanga Target Price	3.06 (2011-03-08)
OSK Target Price	3.34 (2011-03-08)

Accounting Ratio

Return on Equity	7.53%
Dividend Yield	1.16%
Profit Margin	1.79%
Tax Rate	-
Asset Turnover	0.4403
Net Asset Value Per Share	1.76
Net Tangible Asset per share	0.32
Price/Net Tangible Asset Per Share	8.84
Cash Per Share	0.3
Liquidity Current Ratio	1.0419
Liquidity Quick Ratio	0.6145
Liquidity Cash Ratio	0.2641
Gearing Debt to Equity Ratio	1.0384
Gearing Debt to Asset Ratio	0.5077
Working capital per thousand Ringgit sale	3.0%
Days to sell the inventory	120
Days to collect the receivables	188
Days to pay the payables	113

My notes based on 2010 quarter 4 report (number in '000):-
- The Group achieved revenue of RM1.56 billion, profit after tax and minority interest of RM131.20 million and EBITDA (Earning Before Interest, Tax, Depreciation and Amortisation) of RM199.37 million for the year ended 31 December 2010. Compared to the previous year, the lower performance in this year was due to lower job orders, lower contribution margins and higher operating costs

- The Group’s revenue of RM384.23 million and net profit before taxation and minority interest of RM6.87 million for the fourth quarter ended 31 December 2010 were lower by RM34.13 million and RM34.16 million compared to third quarter’s revenue of RM418.36 million and net profit before taxation and minority interest of RM41.03 million respectively. The lower revenue and profit for this quarter are mainly due to lower production achieved for the quarter and higher operating costs

- Estimate next 4Q eps after 2010 Q4 result announced = 0.0655*2*1.1 = 0.1441, estimate PE on current price 2.58 = 17.7
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0089*4*1.2 = 0.0427(use VAT 15%, include incoming new contract), estimate highest/lowest PE = 15.36/10.54
- No estimate for next 4Q eps after 2010 Q2 result announced
- No estimate for next 4Q eps after 2010 Q1 result announced
- No estimate for next 4Q eps after 2009 Q4 result announced
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0081*4 = 0.0324, estimate highest/lowest PE = 11.67/9.39 (DPS 0.015)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0181*4 = 0.0724, estimate highest/lowest PE = 11.67/9.39 (DPS 0.015)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0250*4 = 0.1, estimate highest/lowest PE = 10.45/7
- Estimate next 4Q eps after 2008 Q4 result announced = 0.0214*4 = 0.0856, estimate highest/lowest PE = 9.7/3.56 (DPS 0.015)

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