KLCI Stock - TENAGA / 5347 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	38,107,214,310 (Very Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(6.99-0.2)/0.6395 = 10.62 (Moderate)
Target Price	7.67+0.2 = 7.87 (PE 12.0, EPS 0.6395, DPS 0.2)
Decision	BUY
Comment	Revenue decreased 2.9% and is second consecutive quarter decreasing but higher than preceding year corresponding quarter 1.5%, eps decreased 13.2% and also lower than preceding year corresponding quarter 38.4%, cash generated from operating is more than enough to cover financing activities but still generated cash from financing activities to cover investing activities, weaker liquidity ratio at low level now, lower gearing ratio but still at high level now, all accounting periods are good, high coal price, income from foreign exchange still not stable
First Support Price	6.4
Second Support Price	6.4
Risk Rating	MODERATE

Research House

RHB Target Price	7.5 (2011-01-18)
AMMB Target Price	6.6 (2011-05-31)
Citi Target Price	7.9 (2011-05-31)
HwangDBS Target Price	8.8 (2011-05-31)
Kenanga Target Price	8.06 (2011-05-31)
MIDF Target Price	7.98 (2011-05-31)
OSK Target Price	8.66 (2011-05-31)

Accounting Ratio

Return on Equity	9.78%
Dividend Yield	3.51%
Profit Margin	9.63%
Tax Rate	12.57%
Asset Turnover	0.4131
Net Asset Value Per Share	6.65
Net Tangible Asset per share	6.65
Price/Net Tangible Asset Per Share	0.91
Cash Per Share	1.93
Liquidity Current Ratio	1.543
Liquidity Quick Ratio	1.2974
Liquidity Cash Ratio	0.8612
Gearing Debt to Equity Ratio	1.5196
Gearing Debt to Asset Ratio	0.6028
Working capital per thousand Ringgit sale	17.6%
Days to sell the inventory	32
Days to collect the receivables	51
Days to pay the payables	77

My notes based on 2011 quarter 2 report (number in '000):-
- Higher revenue mainly due to an increase in sales of electricity in the Peninsula and SESB

- Operating expenses increased at a faster rate mainly due to higher generation costs from utilization of coal where the average contracted coal price consumed was USD103.8 per metric tonne as compared to USD80.7 per metric tonne in the corresponding period last financial year

- Estimate next 4Q eps after 2011 Q2 result announced = (0.1415+0.163)*2*1.05 = 0.6395, estimate PE on current price 6.99 = 10.6(DPS 0.2)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.7355*0.8 = 0.5884, estimate highest/lowest PE = 10.74/9.74 (DPS 0.21)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.089*4 = 0.356, estimate highest/lowest PE = 24.21/21.88 (DPS 0.26)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.71*1.05 = 0.7455 (5% increase adjustment), estimate highest/lowest PE = 12.22/11.21 (DPS 0.183)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.2066+0.1859+0.1673+0.1506 = 0.71 (average 10% drop each quarter, coal price increasing but strong Ringgit offset some impact), estimate highest/lowest PE = 12.14/11.01 (DPS 0.183)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.6484, estimate highest/lowest PE = 13.38/11.67 (DPS 0.163)

Coal price chart
- http://www.mongabay.com/images/commodities/charts/chart-coalaust.html
- http://www.globalcoal.com/

MYR/JPY chart

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