KLCI Stock - PROTON / 5304 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	1,867,324,206 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(3.4-0.1)/0.2326 = 14.19 (High)
Target Price	3.02+0.1 = 3.12 (PE 13.0, EPS 0.2326, DPS 0.1)
Decision	Not interested unless revenue and profit higher than FY11Q2
Comment	Revenue decreased 18.2% and is second consecutive quarter decreasing but also lower than preceding year corresponding quarter 9%, eps decreased 191.2% and is second consecutive quarter decreasing and also lower than preceding year corresponding quarter 175.4%, no cash generated from operating but still largely spent in investing hence increased borrowing, weaker liquidity ratio at low level now, higher gearing ratio at below moderate level now, all accounting periods are good, higher inventory expect higher revenue in next coming quarter, Malaysia revenue decreased
First Support Price	3.4
Second Support Price	3.16
Risk Rating	HIGH

Research House

Affin Target Price	4.6 (2010-11-26)
HwangDBS Target Price	4.7 (2011-01-10)
UOB Target Price	3.75 (2011-02-17)
Maybank Target Price	3.4 (2011-02-28)
RHB Target Price	4 (2011-02-28)
TA Target Price	4.52 (2011-02-28)
CIMB Target Price	4.5 (2011-03-03)
AMMB Target Price	5.1 (2011-03-04)
MIDF Target Price	5.2 (2011-04-18)
OSK Target Price	4.78 (2011-04-18)

Accounting Ratio

Return on Equity	2.12%
Dividend Yield	5.88%
Profit Margin	-2.81%
Tax Rate	-
Asset Turnover	1.1421
Net Asset Value Per Share	9.73
Net Tangible Asset per share	7.96
Price/Net Tangible Asset Per Share	0.51
Cash Per Share	1.76
Liquidity Current Ratio	1.7076
Liquidity Quick Ratio	0.9316
Liquidity Cash Ratio	0.4521
Gearing Debt to Equity Ratio	0.413
Gearing Debt to Asset Ratio	0.2923
Working capital per thousand Ringgit sale	17.6%
Days to sell the inventory	69
Days to collect the receivables	41
Days to pay the payables	65

My notes based on 2011 quarter 3 report (number in '000):-
- The decline in profit is largely attributable to higher branding costs as well as restructuring expenses incurred by Lotus Group International Limited ("LGIL"). As part of the transformation plans to turn around LGIL, the Group started investing in rationalization of dealers network and branding activities to deliver the 5-year business plans

- During the quarter, the Group experienced lower domestics sales volume as well as increased promotional and marketing spending by a principal subsidiary

- Estimate next 4Q eps after 2011 Q3 result announced = 0.12*0.95*3-0.1094 = 0.2326(estimate average 5% lower profit from FY11Q2 for next 3 quarter and FY12Q3 still loss), estimate PE on current price 3.4 = 14.19(DPS 0.1)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.4608, estimate highest/lowest PE = 10.37/8.33 (DPS 0.2)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.4902*0.95 = 0.4657, estimate highest/lowest PE = 10.37/9.28 (DPS 0.2)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.4353*1.05 = 0.4571(5% increase), estimate highest/lowest PE = 10.44/9.52
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1451*4 = 0.5804, estimate highest/lowest PE = 8.67/6.89
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1494*4 = 0.5976, estimate highest/lowest PE = 7.16/6.12 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0993*4 = 0.3972, estimate highest/lowest PE = 11.15/7.25 (DPS 0.05)

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