KLCI Stock - HSPLANT / 5138 - 2010 Quarter 1

Company Info

Market Capital (Capital Size)	2,200,000,000 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(2.75-0.13)/0.2631 = 9.96 (Moderate)
Target Price	3.68+0.13 = 3.81 (PE 14.0, EPS 0.2631, DPS 0.13)
Decision	BUY
Comment	Revenue decreased 8.5% but higher than preceding year corresponding quarter 42.1%, eps increased 3.9% and is third consecutive quarter increasing and also higher than preceding year corresponding quarter 58.3%, cash generated from operating is more than enough to cover all expenses, stronger liquidity ratio at high level now, lower gearing ratio at low level now, all accounting periods are good, CPO price increasing from May to Jun
First Support Price	2.6
Second Support Price	2.35
Risk Rating	MODERATE

Research House

Affin Target Price

4.02 (2011-01-27)

Accounting Ratio

Return on Equity	10.90%
Dividend Yield	4.73%
Profit Margin	53.49%
Tax Rate	25.04%
Asset Turnover	0.248
Net Asset Value Per Share	2.27
Net Tangible Asset per share	2.27
Price/Net Tangible Asset Per Share	1.2
Cash Per Share	0.15
Liquidity Current Ratio	3.2065
Liquidity Quick Ratio	2.762
Liquidity Cash Ratio	2.1914
Gearing Debt to Equity Ratio	0.145
Gearing Debt to Asset Ratio	0.1266
Working capital per thousand Ringgit sale	23.5%
Days to sell the inventory	34
Days to collect the receivables	18
Days to pay the payables	45

My notes based on 2011 quarter 1 report (number in '000):-
- The significantly better performance in the current quarter was mainly attributable to higher average selling prices but mitigated somewhat by lower sales volume. Average selling price of Crude Palm Oil (CPO) and Palm Kernel (PK) realised for the current quarter were RM3,542 and RM2,907 per tonne which were higher than the preceding year corresponding quarter of RM2,476 and RM1,359 per tonne respectively. CPO sales volume at 31,831 tonnes was lower than the preceding year corresponding quarter by 7% whilst PK sales volume at 8,048 tonnes was marginally higher than the preceding year corresponding quarter. The lower CPO sales volume for the current quarter under review was generally affected by seasonal cropping pattern and relatively wet weather conditions as well as lower mature area due to higher replanting undertaken during the period

- Group profit before tax for the current quarter at RM77.1 million was 3% higher than the preceding quarter of RM75.0 million mainly attributable to higher average selling price of CPO and PK at RM3,542 and RM2,907 per tonne as compared to the preceding quarter of RM2,843 and RM2,029 per tonne respectively although sales volume was lower by 31% as compared to the preceding quarter of 45,803 tonnes

- Estimate next 4Q eps after 2011 Q1 result announced = 0.2392*1.1 = 0.2631, estimate PE on current price 2.75 = 9.96(DPS 0.13)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0521*1.1*4 = 0.2292, estimate highest/lowest PE = 13.57/11.21 (DPS 0.13)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0521*1.1*4 = 0.2292, estimate highest/lowest PE = 15.44/12.48 (DPS 0.11)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0454*1.1*4 = 0.1998, estimate highest/lowest PE = 15.42/10.76 (DPS 0.11)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0456*1.1*4 = 0.2006, estimate highest/lowest PE = 11.42/10.02 (DPS 0.09)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0396*4 = 0.1584, estimate highest/lowest PE = 15.4/12.31 (DPS 0.09)

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