KLCI Stock - MMCCORP / 2194 - 2010 Quarter 4

Company Info

Market Capital (Capital Size)	8,800,219,215 (Very Large)
Par Value	RM 0.10

My Analysis

Forecast P/E now	(2.89-0.035)/0.1133 = 25.20 (High)
Target Price	1.81+0.035 = 1.85 (PE 16.0, EPS 0.1133, DPS 0.035)
Decision	Not interested unless profit from logistic segment increase
Comment	Revenue increased 1% and also higher than preceding year corresponding quarter 2.6%, eps decreased 11.1% and also lower than preceding year corresponding quarter 2.8%, cash generated from operating not enough to cover financing activities, weaker liquidity ratio at low level now, better gearing ratio but still at very high ratio now, all accounting periods are good, construction division not profit, logistic division lower profit
First Support Price	2.56
Second Support Price	2.35
Risk Rating	MODERATE

Research House

Credit Suisse Target Price	3.8 (2010-10-04)
S&P Target Price	3 (2010-11-25)
HwangDBS Target Price	4.05 (2011-02-23)
Kenanga Target Price	2.74 (2011-03-07)
OSK Target Price	3.62 (2011-04-29)

Accounting Ratio

Return on Equity	3.32%
Dividend Yield	1.21%
Profit Margin	5.35%
Tax Rate	-
Asset Turnover	0.2461
Net Asset Value Per Share	2.17
Net Tangible Asset per share	-0.45
Price/Net Tangible Asset Per Share	-6.24
Cash Per Share	1.36
Liquidity Current Ratio	1.2937
Liquidity Quick Ratio	1.19
Liquidity Cash Ratio	0.7345
Gearing Debt to Equity Ratio	3.8845
Gearing Debt to Asset Ratio	0.7112
Working capital per thousand Ringgit sale	18.7%
Days to sell the inventory	33
Days to collect the receivables	92
Days to pay the payables	90

My notes based on 2010 quarter 4 report (number in '000):-
- The Group‟s profit before zakat and taxation for the twelve-months financial period ended 31 December 2010 of RM855.7 million was higher by RM174.1 million compared to the corresponding financial period ended 31 December 2009

- Higher profit recorded from Energy & Utilities division by RM30.5 million or 4.2% due to higher volume of gas sold, higher contribution from foreign associates and lower finance cost
following repayment of loan during the period

- Lower losses recorded from Corporate & Others division by RM146.5 million or 88.7% mainly driven by the gain on disposal of investment in Sime Darby Berhad and Integrated Rubber Corporation Berhad. This was offset by higher finance costs at MMC Company level

- The Transport & Logistics division recorded a fairly constant performance as in the corresponding financial period ended 31 December 2009

- The Group recorded a profit before zakat and taxation of RM121.9 million in the current quarter as compared to RM348.2 million in the preceding quarter. This was mainly due to lower contribution from the energy and utilities division as a result of the provision for impairment loss on intangible assets of the an associate

- Estimate next 4Q eps after 2010 Q4 result announced = 0.1133, estimate PE on current price 2.89 = 25.2(DPS 0.035)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0676*2*1.1 = 0.1487, estimate highest/lowest PE = 21.45/17.82 (DPS 0.03)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0402*2*1.1 = 0.0884, estimate highest/lowest PE = 37.56/27.94 (DPS 0.03)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0777*1.1 = 0.0855, estimate highest/lowest PE = 31.23/25.73 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0777*1.1 = 0.0855, estimate highest/lowest PE = 29.82/25.38 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0297*4*0.9 = 0.1069, estimate highest/lowest PE = 23.43/20.63 (DPS 0.025)

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