KLCI Stock - MYEG / 0138 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	462,809,270 (Small)
Par Value	RM 0.10

My Analysis

Forecast P/E now	(0.77-0.0060)/0.042 = 18.19 (Moderate)
Target Price	0.84+0.0060 = 0.85 (PE 20.0, EPS 0.042, DPS 0.0060)
Decision	BUY
Comment	Revenue increased 9.7% and also higher than preceding year corresponding quarter 14.3%, eps increased 106.4% and also higher than preceding year corresponding quarter 22.8%, cash generated from operating is more than enough to cover all expenses, better liquidity ratio at strong level now, better gearing ratio at very low level now, slightly high receivables but offset by better working capital, invest into tax monitoring system
First Support Price	0.72
Second Support Price	0.69
Risk Rating	MODERATE

Accounting Ratio

Return on Equity	23.27%
Dividend Yield	0.78%
Profit Margin	34.43%
Tax Rate	0.56%
Asset Turnover	0.6339
Net Asset Value Per Share	0.15
Net Tangible Asset per share	0.13
Price/Net Tangible Asset Per Share	5.85
Cash Per Share	0.03
Liquidity Current Ratio	5.8943
Liquidity Quick Ratio	5.8943
Liquidity Cash Ratio	2.3257
Gearing Debt to Equity Ratio	0.1204
Gearing Debt to Asset Ratio	0.1075
Working capital per thousand Ringgit sale	53.4%
Days to sell the inventory	-
Days to collect the receivables	142
Days to pay the payables	42

My notes based on 2011 quarter 2 report (number in '000):-
- The Group posted Revenue and Profit after Taxation (“PAT”) of RM16.97 million and RM5.81 million respectively for the second financial quarter (“Q2 FY2011”) as compared to RM14.84 million and RM4.74 million respectively in the corresponding quarter (“Q2 FY2010”). This represents an increase of approximately RM2.13 million (or 14.4%) and RM1.07 million (or 22.6%) in Revenue and PAT respectively

- For the year to date period ended 31 December 2010 (“6M FY2011), the Group recorded Revenue of RM32.44 million as compared to RM28.44 million in the corresponding period (“6M FY2010). This represent an increase of RM4.0 million (14.1%) in Revenue. However, PAT for 6M FY2011 decreased by RM0.6 million (6.5%) to RM8.61 million as compared to RM9.21 million achieved in 6M FY2010

- The increase in Revenue are primarily attributable to:
i)increase in JPJ related services for theory test taking
ii) increase in online payment of traffic summons due to the campaign by Polis Di Raja Malaysia (“PDRM”) during Q2 FY2011
iii) encouraging growth for our online renewal of insurance and road tax transactions

- However, this was offset by the continual marketing expenses to further promote MYEG’s brand name and services during the period under review as compared to the corresponding period in FY2010

- For the Quarter under review, the Group recorded Revenue of RM16.97 million, an increase of RM1.50 million as compared to Q1 FY2011 Revenue. PAT increased by RM3.01 million (107.4%) to RM5.81 million, as compared to Q1 FY2011 PAT of RM2.80 million. The increase in Revenue and PAT is primarily attributable to higher volume from JPJ related services for theory test taking and payment of traffic summons due to the campaign by PDRM in Q2 FY2011 as compared to the preceding quarter

- Estimate next 4Q eps after 2011 Q2 result announced = 0.0097*4*1.1 = 0.042, estimate PE on current price 0.77 = 18.19(DPS 0.006)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.032*1.1 = 0.0352, estimate highest/lowest PE = 26.7/20.45 (DPS 0.005)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0097*4*1.1 = 0.0427, estimate highest/lowest PE = 19.32/16.16 (DPS 0.005)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0088*4 = 0.0352, estimate highest/lowest PE = 24.57/14.91 (DPS 0.01)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0079*4 = 0.0316, estimate highest/lowest PE = 20.57/12.66 (DPS 0.01)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0074*4 = 0.0296, estimate highest/lowest PE = 18.44/13.88 (DPS 0.0092)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0069*4 = 0.0276, estimate highest/lowest PE = 19.63/14.37 (DPS 0.01835)

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