KLCI Stock - NOTION / 0083 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	332,306,962 (Small)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(2.15-0.06)/0.24 = 8.71 (Moderate)
Target Price	2.40+0.045 = 2.46 (PE 10.0, EPS 0.24, DPS 0.06)
Decision	Not interested unless revenue and profit increase more
Comment	Revenue decreased 10.1% and also lower than preceding year corresponding quarter 4.9%, eps decreased 20.3% and also lower than preceding year corresponding quarter 13%, cash generated from operating not enough to cover financing & investing activities hence still generate cash from financing activities, stronger liquidity at moderate level now, lower gearing ratio at moderate level now, working capital increasing, all accounting periods are good, affecting by weakening USD but got USD and EURO currency hedging to stabilize the effect of a strong ringgit, impacted by the Sendai earthquake
First Support Price	2.0
Second Support Price	1.75
Risk Rating	MODERATE

Research House

HwangDBS Target Price	2.5 (2011-01-24)
ECM Target Price	2.5 (2011-03-21)
Maybank Target Price	2.4 (2011-03-24)
RHB Target Price	2.25 (2011-04-12)
HLG Target Price	2.58 (2011-05-11)
OSK Target Price	2.12 (2011-05-11)

Accounting Ratio

Return on Equity	14.40%
Dividend Yield	3.49%
Profit Margin	22.42%
Tax Rate	10.47%
Asset Turnover	0.5895
Net Asset Value Per Share	1.62
Net Tangible Asset per share	1.62
Price/Net Tangible Asset Per Share	1.28
Cash Per Share	0.19
Liquidity Current Ratio	2.6317
Liquidity Quick Ratio	1.8283
Liquidity Cash Ratio	0.5854
Gearing Debt to Equity Ratio	0.5388
Gearing Debt to Asset Ratio	0.3491
Working capital per thousand Ringgit sale	35.8%
Days to sell the inventory	74
Days to collect the receivables	82
Days to pay the payables	35

My notes based on 2011 quarter 2 report (number in '000):-
- The lower PAT is mainly attributable to the lower revenue from camera segment

- In Q2FY2011, HDD parts revenue recorded RM20.5 million (Q1FY2011: RM20.8 million), camera parts recorded RM24.4 million (Q1FY2011: RM29.9 million) whilst the industrial/automotive revenue was at RM9.0 million (Q1FY2011: RM9.3 million). The product mix for Q2FY2011 was HDD:Camera:Industrial/Automotive of 38%:45%:17% compared to previous quarter's mix of 35%:50%:15%

- Estimate next 4Q eps after 2011 Q2 result announced = 0.24, estimate PE on current price 2.15 = 8.71(DPS 0.06)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.06*4 = 0.24, estimate highest/lowest PE = 9.6/6.81 (DPS 0.045)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0523*4*0.9 = 0.1883, estimate highest/lowest PE = 11.44/8.2 (DPS 0.045)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0192*3+0.0806 = 0.1382(It may take 3Q to apply corrective measures to control costs, minimise rejects and maximise its production capacity), estimate highest/lowest PE = 15.16/10.67 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.3788 (0.1804*2 = 0.3608, 5% grow from 0.3608), estimate highest/lowest PE = 8.65/5.24 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.3674, estimate highest/lowest PE = 9.44/7.57 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0185*4 = 0.074, estimate highest/lowest PE = 11.62/9.95 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0158*4 = 0.0632, estimate highest/lowest PE = 8.39/5.49 (DPS 0.01)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0065*4 = 0.026, estimate highest/lowest PE = 13.46/9.23 (DPS 0.01)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0103*4 = 0.0412, estimate highest/lowest PE = 6.8/3.64 (DPS 0.01)

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