KLCI Stock - MAHSING / 8583 - 2010 Quarter 4

Company Info

Market Capital (Capital Size)	2,153,763,293 (Large)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(2.59-0.076)/0.1654 = 15.20 (High)
Target Price	2.32+0.076 = 2.39 (PE 14.0, EPS 0.1654, DPS 0.076)
Decision	NOT BUY unless price below 2.4
Comment	Revenue increased 5.6% and also higher than preceding year corresponding quarter 20.3%, eps increased 5.3% and is second consecutive quarter increasing but lower than preceding year corresponding quarter 3.1%, no cash generated from operating hence generate cash from financing, liquidity ratio decreasing from high to moderate level now, gearing ratio increasing at high level now, inventory and payables increasing to very high level but working capital not increase
First Support Price	2.3
Second Support Price	1.8
Risk Rating	MODERATE

Research House

HLG Target Price	2.61 (2010-11-24)
Kenanga Target Price	2.48 (2010-11-24)
CIMB Target Price	2.35 (2010-11-30)
MIDF Target Price	2.13 (2010-11-30)
RHB Target Price	2.5 (2011-01-13)
Nomura Target Price	3.08 (2011-02-10)
TA Target Price	3.2 (2011-02-10)
Maybank Target Price	3 (2011-02-18)

Accounting Ratio

Return on Equity	12.61%
Dividend Yield	2.93%
Profit Margin	13.10%
Tax Rate	17.60%
Asset Turnover	0.5193
Net Asset Value Per Share	1.1
Net Tangible Asset per share	1.1
Price/Net Tangible Asset Per Share	2.28
Cash Per Share	0.37
Liquidity Current Ratio	2.6112
Liquidity Quick Ratio	0.9826
Liquidity Cash Ratio	0.4095
Gearing Debt to Equity Ratio	1.3074
Gearing Debt to Asset Ratio	0.5619
Working capital per thousand Ringgit sale	109.4%
Days to sell the inventory	518
Days to collect the receivables	140
Days to pay the payables	283

My notes based on 2010 quarter 4 report (number in '000):-
- The Group recorded strong revenue and profit after tax and minority interest(PATMI) of approximately RM1.1 billion and RM118.1 million respectively for the current year to date. This represents 58% improvement for revenue and 25% improvement for PATMI compared to the previous year. The current quarter revenue and PATMI of approximately RM299.3 million and RM31.4 million represents 20% and 25% improvement respectively over same quarter last year

- The improved revenue and profit for the financial year is attributable to progressive recognition of development revenue and profit contribution from its property development activities carried out in Kuala Lumpur, Klang Valley, Penang and Johor Bahru. Ongoing projects which contributed to the Group's profit and revenue include Klang Valley residential projects such as Perdana Residence 2 in Selayang, Garden Residence in Cyberjaya, Hijauan Residence and One Legenda in Cheras, Kemuning Residence in Shah Alam, Aman Perdana in Meru - Shah Alam, M-Suites in Jalan Ampang; commercial projects such as Southgate Commercial Centre in Sungai Besi, StarParc Point in Setapak and industrial projects such as i-Parc 1 in Bukit Jelutong and i-Parc 2 in Shah Alam. Also contributing are projects in Penang i.e. Residence @ Southbay and Legenda @ Southbay and in Johor Bahru, i.e. Sierra Perdana, Sri Pulai Perdana 2 and Austin Perdana. The Plastics division also performed well with 36% and 89% improvement in revenue and operating profit compared to the previous year

- The Group broke the RM1 billion mark to achieve record property sales of more than RM1.5 billion, which exceeded its initial internal target by 50% and is a 113% improvement from sales achieved in 2009 (of RM727 million). With 10 land deals announced during the year worth RM756 million, the Group further strengthened its land bank with supply of choice land at strategic locations to drive future earnings growth. We have established a strong presence in the land market with our proven ability to secure land banks that we are able to value add for high margin returns and many of those lands are secured with favourable deferred payment terms

- The fast take-up rate, improved operation efficiency, timely execution and delivery of quality property units ensured the Group's balance sheets remained strong with net gearing at 0.22

- The 2010 performance is again another testament to the Group's very successful "fast turnaround" business model

- The Group's current quarter profit before taxation is lower than the preceding quarter ended 30 September 2010. This is mainly due to higher selling and marketing expenses as a result of more launches and sales activities in the current quarter

- Estimate next 4Q eps after 2010 Q4 result announced = 0.0376*4*1.1 = 0.1654, estimate PE on current price 2.59 = 15.2(DPS 0.076)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0357*4*1.1 = 0.1571, estimate highest/lowest PE = 17.6/10.85 (DPS 0.065)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0355*4*1.1 = 0.1562, estimate highest/lowest PE = 12.45/10.47 (DPS 0.065)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.034*4*1.1 = 0.1496, estimate highest/lowest PE = 12.13/9.99 (DPS 0.065)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0388*4 = 0.1552, estimate highest/lowest PE = 12.6/10.53 (DPS 0.065)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0373*4 = 0.1492, estimate highest/lowest PE = 12.73/10.72 (DPS 0.08)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0366*4 = 0.1464, estimate highest/lowest PE = 13.66/11.61 (DPS 0.08)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.036*4 = 0.144, estimate highest/lowest PE = 13.68/11.39 (DPS 0.08)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.0271*4 = 0.1084, estimate highest/lowest PE = 16.33/13.28 (DPS 0.08)

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