KLCI Stock - TOPGLOV / 7113 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	3,253,122,544 (Large)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(5.26-0.1)/0.2256 = 22.87 (High)
Target Price	3.38+0.1 = 3.48 (PE 15.0, EPS 0.2256, DPS 0.1)
Decision	Not interested unless latex price and USD dollor recover to higher profit level
Comment	Revenue increased 10.3% but lower than preceding year corresponding quarter 3.7%, eps increased 0.7% but lower than preceding year corresponding quarter 61.1%, cash generated from operating after deduct operating expenses then not enough to cover dividend and in addition spent large expenses in investing activities, weaker liquidity ratio at high level now, higher gearing ratio at below moderate level now, all accounting ratio are good, latex price decreasing, USD against MYR slowly strengthening since end of May
First Support Price	5.0
Second Support Price	4.75
Risk Rating	MODERATE

Research House

Maybank Target Price	5.1 (2011-03-30)
RHB Target Price	4.09 (2011-05-20)
OSK Target Price	6.5 (2011-05-30)
Affin Target Price	4.62 (2011-06-09)
AMMB Target Price	3.9 (2011-06-14)
HwangDB Target Price	5.3 (2011-06-15)
CIMB Target Price	4.76 (2011-06-16)
MIDF Target Price	5.14 (2011-06-16)

Accounting Ratio

Return on Equity	11.77%
Dividend Yield	2.66%
Profit Margin	6.45%
Tax Rate	24.53%
Asset Turnover	1.4919
Net Asset Value Per Share	1.76
Net Tangible Asset per share	1.73
Price/Net Tangible Asset Per Share	3.04
Cash Per Share	0.35
Liquidity Current Ratio	3.3249
Liquidity Quick Ratio	2.4713
Liquidity Cash Ratio	1.0268
Gearing Debt to Equity Ratio	0.2275
Gearing Debt to Asset Ratio	0.1821
Working capital per thousand Ringgit sale	24.1%
Days to sell the inventory	35
Days to collect the receivables	51
Days to pay the payables	34

My notes based on 2011 Quarter 3 report (number in '000):-
- The decline was mainly due to last year’s exceptionally good result which was boosted by a surge in demand of rubber gloves during the influenza A(H1N1) virus outbreak; and the more favourable latex prices and US Dollar exchange rate at that time. Average latex prices rose by 39% (from RM7.10/kg in 3Q2010 to RM9.85/kg in 3Q2011) while the average US dollar against Ringgit weakened by 7.4% (RM3.26 in 3Q2010 to RM3.02 in 3Q2011). Also, the time lag in the cost pass-through to its customers has contributed to the decline in profit. However, since reaching its peak of RM10.99 per kg on 11 April 2011, latex price has declined by 14% to RM9.44 per kg as at 16 June 2011

- Estimate next 4Q eps after 2011 Q3 result announced = 0.047*4*1.2 = 0.2256, estimate PE on current price 5.26 = 22.87(DPS 0.1)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.08+0.088+0.0968+0.1065 = 0.3713, estimate highest/lowest PE = 15.19/13.74 (DPS 0.23)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.2122*4 = 0.8488*1.1 = 0.9337(10% adjustment), estimate highest/lowest PE = 15.5/10.36 (DPS 0.29)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.235*4 = 0.94, estimate highest/lowest PE = 14.68/11.66 (DPS 0.22)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.217*4 = 0.868, estimate highest/lowest PE = 14.31/10.75 (DPS 0.22)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.191*4 = 0.764, estimate highest/lowest PE = 12.23/10.2 (DPS 0.22)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1424*4 = 0.5696, estimate highest/lowest PE = 14.04/10.8 (DPS 0.15)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.1221*4 = 0.4884, estimate highest/lowest PE = 13.21/9.89 (DPS 0.15)

TONGHER latest news (English)

TONGHER latest news (Chinese)