KLCI Stock - LATEXX / 7064 - 2011 Quarter 1

Company Info

Market Capital (Capital Size)	492,966,917 (Small)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(2.22-0.075)/0.2125 = 10.09 (Moderate)
Target Price	2.34+0.075 = 2.41 (PE 11.0, EPS 0.2125, DPS 0.075)
Decision	Not interested unless revenue and profit increase more
Comment	Revenue decreased 11.3% and is third consecutive quarter decreasing and also lower than preceding year corresponding quarter 27%, eps increased 21.4% but lower than preceding year corresponding quarter 39%, cash generated from operating is almost to cover all expenses, stronger liquidity ratio but still at low level now, lower gearing ratio at moderate level now, all accounting periods are good, benefit from latex price starting to drop, profit continue affecting by weakening of USD dollar, enlarging customer base to non-USA markets, aggressively penetrating into the non-medical markets, allocate more capacity to nitrile production
First Support Price	2.0
Second Support Price	1.8
Risk Rating	MODERATE

Accounting Ratio

Return on Equity	26.93%
Dividend Yield	2.25%
Profit Margin	15.77%
Tax Rate	14.81%
Asset Turnover	1.1312
Net Asset Value Per Share	0.95
Net Tangible Asset per share	0.87
Price/Net Tangible Asset Per Share	2.76
Cash Per Share	0.23
Liquidity Current Ratio	1.8081
Liquidity Quick Ratio	1.2975
Liquidity Cash Ratio	0.6377
Gearing Debt to Equity Ratio	0.6528
Gearing Debt to Asset Ratio	0.395
Working capital per thousand Ringgit sale	16.2%
Days to sell the inventory	45
Days to collect the receivables	48
Days to pay the payables	64

My notes based on 2011 quarter 1 report (number in '000):-
- The decrease in the Group’s revenue and the net profit of the current year was mainly due to the persistently high latex price over the period that resulted lower sales in NR gloves, and the continuous weakening of the USD that dampened the Group’s profit margin

- Estimate next 4Q eps after 2011 Q1 result announced = 0.0483*4*1.1 = 0.2125, estimate PE on current price 2.22 = 10.09(DPS 0.075)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.2751*0.95 = 0.2613, estimate highest/lowest PE = 10.62/8.78 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.3043*0.95 = 0.289, estimate highest/lowest PE = 9.91/8.15 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0824*4 = 0.3296+0.012(QbQ improvement adjustment) = 0.3416, estimate highest/lowest PE = 10.47/6.72 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0792*4 = 0.3168+0.02(QbQ improvement adjustment) = 0.3368, estimate highest/lowest PE = 11.46/9.62 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0675*4 = 0.27+0.02(QbQ improvement adjustment) = 0.29, estimate highest/lowest PE = 14.62/12.14 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0566*4 = 0.2264, estimate highest/lowest PE = 21.78/10.42 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0586*4 = 0.2344, estimate highest/lowest PE = 11.99/7.81 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.047*4 = 0.188, estimate highest/lowest PE = 10.37/4.2 (DPS 0.02)

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