KLCI Stock - TCHONG / 4405 - 2011 Quarter 1

Company Info

Market Capital (Capital Size)	2,929,920,000 (Large)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(4.36-0.12)/0.3664 = 11.57 (Moderate)
Target Price	5.50+0.12 = 5.62 (PE 15.0, EPS 0.3664, DPS 0.12)
Decision	BUY
Comment	Revenue increased 35.5% and also higher than preceding year corresponding quarter 30%, eps increased 42.2% and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 14.5%, cash generated from operating is slightly extra than financing expenses and still generated cash from investing activities, stronger liquidity ratio at moderate level now, lower gearing ratio at moderate level now, all accounting turnover periods are good
First Support Price	4.2
Second Support Price	4.0
Risk Rating	MODERATE

Research House

CIMB Target Price	7.3 (2011-03-03)
AMMB Target Price	5 (2011-03-17)
RHB Target Price	4.95 (2011-05-13)
Kenanga Target Price	4.8 (2011-05-19)
Maybank Target Price	4 (2011-05-19)
MIDF Target Price	4.94 (2011-05-19)
OSK Target Price	4.27 (2011-05-19)

Accounting Ratio

Return on Equity	14.21%
Dividend Yield	2.75%
Profit Margin	9.29%
Tax Rate	30.05%
Asset Turnover	1.3489
Net Asset Value Per Share	2.69
Net Tangible Asset per share	2.67
Price/Net Tangible Asset Per Share	1.61
Cash Per Share	0.6
Liquidity Current Ratio	2.7943
Liquidity Quick Ratio	1.373
Liquidity Cash Ratio	0.6299
Gearing Debt to Equity Ratio	0.5851
Gearing Debt to Asset Ratio	0.3681
Working capital per thousand Ringgit sale	29.5%
Days to sell the inventory	94
Days to collect the receivables	44
Days to pay the payables	35

My notes based on 2011 Quarter 1 report (number in '000):-
- The all-new NISSAN Teana drove the performance in Q1 2011 compared to Q4 2010 because it was launched on 23 November 2010 and the bulk of sales were recognised at the start of 2011 instead of 2010. Due to a higher value added product offering, Operating Profit margins grew from 8.5% in Q4 2010 to 9.6% in Q1 2011 despite the drag in forex and NVL. Notwithstanding exceptional quarterly sales and stockpiling just in time, inventories stood at RM878.8 million as at 31 March 2011 compared to over RM1.0 billion as at 31 December 2010

- Estimate next 4Q eps after 2011 Q1 result announced = 0.3664, estimate PE on current price 4.36 = 11.57(DPS 0.12)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.35, estimate highest/lowest PE = 13.8/11.94 (DPS 0.12)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0983*4 = 0.3932, estimate highest/lowest PE = 12.03/1 (DPS 0.12)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0991*4 = 0.3964, estimate highest/lowest PE = 12.92/9.51 (DPS 0.11)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0639*4 = 0.2556, estimate highest/lowest PE = 19.91/10.92 (DPS 0.11)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0527*4 = 0.2108, estimate highest/lowest PE = 16.65/10.44 (DPS 0.1)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0528*4 = 0.2112, estimate highest/lowest PE = 12.31/8.19 (DPS 0.1)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0626*4 = 0.2504, estimate highest/lowest PE = 7.35/5.39 (DPS 0.1)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.0425*4 = 0.17, estimate highest/lowest PE = 9.12/6.12 (DPS 0.1)

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