KLCI Stock - DIALOG / 7277 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	5,586,821,332 (Very Large)
Par Value	RM 0.10

My Analysis

Forecast P/E now	(2.8-0.031)/0.0902 = 30.70 (High)
Target Price	1.44+0.031 = 1.47 (PE 16.0, EPS 0.0902, DPS 0.031)
Decision	Not interested due to PE too high
Comment	Revenue increased 12.2% and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 6.5%, eps increased 5.5% and is third consecutive quarter increasing and also higher than preceding year corresponding quarter 19.9%, cash generated from operating is more than enough to cover all expenses, stronger liquidity ratio but still at low level now, lower gearing ratio at moderate level now, all accounting periods except payables slight high but offset by higher working capital, Pengerang project, acquired New Zealand largest heavy fabrication company
First Support Price	2.6
Second Support Price	2.3
Risk Rating	HIGH

Research House

MIMB Target Price	2.15 (2010-12-27)
RHB Target Price	2.11 (2011-01-03)
AMMB Target Price	3.04 (2011-05-04)
OSK Target Price	3.12 (2011-05-12)
CIMB Target Price	3.27 (2011-05-16)
Maybank Target Price	3.35 (2011-06-02)
MIDF Target Price	2.94 (2011-06-02)

Accounting Ratio

Return on Equity	23.53%
Dividend Yield	1.11%
Profit Margin	17.10%
Tax Rate	20.13%
Asset Turnover	1.136
Net Asset Value Per Share	0.28
Net Tangible Asset per share	0.28
Price/Net Tangible Asset Per Share	9.64
Cash Per Share	0.18
Liquidity Current Ratio	1.8953
Liquidity Quick Ratio	1.7979
Liquidity Cash Ratio	1.0327
Gearing Debt to Equity Ratio	0.6684
Gearing Debt to Asset Ratio	0.3838
Working capital per thousand Ringgit sale	28.0%
Days to sell the inventory	13
Days to collect the receivables	86
Days to pay the payables	102

My notes based on 2011 quarter 3 report (number in '000):-
- The outstanding results were mainly attributable to higher contribution from Engineering & Construction and Plant Maintenance activities in Malaysia and Singapore. The provision of specialist product & services for International operation also recorded better performance in the current reporting quarter. In addition, the commencement of operation by Langsat Terminal
(One) Sdn Bhd in Tanjung Langsat, Johor in September 2009 for its Phase 1 and in April 2010 for its Phase 2, had also contributed positively to the Group’s financial results in the current financial quarter

- The Group’s current quarter revenue of RM301.2 million and profit before tax of RM51.5 million recorded an increase by 12% and 10% respectively, against the preceding quarter. Higher contributions were seen from Plant Maintenance activities in Malaysia and Engineering & Construction activities in Singapore. The provision of specialist product & services for International operation also recorded better performance in the current reporting quarter

- Estimate next 4Q eps after 2011 Q3 result announced = (0.0183+0.0193)*2*1.2 = 0.0902, estimate PE on current price 2.8 = 30.7(DPS 0.031)
- Estimate next 4Q eps after 2011 Q2 result announced = (0.0183+0.0146)*2*1.05 = 0.0691, estimate highest/lowest PE = 38.77/30.38 (DPS 0.031)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0169*4*1.05 = 0.071(ROE 6% per quarter), estimate highest/lowest PE = 31.82/19.14 (DPS 0.031)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0146*4*1.05 = 0.0613, estimate highest/lowest PE = 23.8/16.95 (DPS 0.031)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0162*4*1.05 = 0.068(5% increase), estimate highest/lowest PE = 15.93/14.16 (DPS 0.037)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.04*2 = 0.08, estimate highest/lowest PE = 14.3/11.5 (DPS 0.036)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0193*4 = 0.0772, estimate highest/lowest PE = 18.83/15.73 (DPS 0.036)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0659*1.1 = 0.0725, estimate highest/lowest PE = 18.4/15.64 (DPS 0.036)

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