KLCI Stock - DIALOG / 7277 - 2011 Quarter 4

Company Info

Market Capital (Capital Size)	4,870,351,344 (Large)
Par Value	RM 0.10

My Analysis

Forecast P/E now	(2.44-0.031)/0.1085 = 22.20 (High)
Target Price	1.95+0.031 = 1.98 (PE 18.0, EPS 0.1085, DPS 0.031)
Decision	Not interested unless 50d moving average back to uptrend
Comment	Revenue increased 24.5% and was third consecutive quarter increasing and also higher than preceding year corresponding quarter 37.8%, eps increased 17.1% and is fourth consecutive quarter increasing and also higher than preceding year corresponding quarter 43.9%, cash generated from operating is more than enough to cover financing expenses but not for investing hence still generated cash from financing activities, weaker liquidity ratio at low level now, higher gearing ratio at moderate level now, all accounting ratio except payables slightly high also good, Pengerang project, acquired New Zealand largest heavy fabrication company
First Support Price	2.4
Second Support Price	2.2
Risk Rating	HIGH

Research House

MIMB Target Price	2.15 (2010-12-27)
Maybank Target Price	3.35 (2011-06-02)
AMMB Target Price	3.04 (2011-07-15)
MIDF Target Price	2.94 (2011-07-15)
OSK Target Price	3.43 (2011-08-15)
CIMB Target Price	3.48 (2011-08-22)
RHB Target Price	3.9 (2011-08-24)

Accounting Ratio

Return on Equity	24.57%
Dividend Yield	1.27%
Profit Margin	16.13%
Tax Rate	21.94%
Asset Turnover	1.1173
Net Asset Value Per Share	0.29
Net Tangible Asset per share	0.28
Price/Net Tangible Asset Per Share	9.0
Cash Per Share	0.14
Liquidity Current Ratio	1.5023
Liquidity Quick Ratio	1.3542
Liquidity Cash Ratio	0.634
Gearing Debt to Equity Ratio	0.7916
Gearing Debt to Asset Ratio	0.4268
Working capital per thousand Ringgit sale	18.3%
Days to sell the inventory	23
Days to collect the receivables	95
Days to pay the payables	113

My notes based on 2011 quarter 4 report (number in '000):-
- Higher revenue and pbt results of all divisions outperformed in particular the Engineering & Construction and Plant Maintenance services, both in Malaysia and overseas

- In addition, the commencement of operation by Langsat Terminal (One) Sdn Bhd in Tanjung Langsat, Johor in September 2009 for its phase 1 and in April 2010 for its phase 2, together with the acquisition of Fitzroy Engineering Group Limited in April 2011 had contributed positively to the Group’s financial results in the current financial year

- Estimate next 4Q eps after 2011 Q4 result announced = 0.0226*4*1.2 = 0.1085, estimate PE on current price 2.44 = 22.2(DPS 0.031)
- Estimate next 4Q eps after 2011 Q3 result announced = (0.0183+0.0193)*2*1.2 = 0.0902, estimate highest/lowest PE = 31.59/24.05 (DPS 0.031)
- Estimate next 4Q eps after 2011 Q2 result announced = (0.0183+0.0146)*2*1.05 = 0.0691, estimate highest/lowest PE = 38.77/30.38 (DPS 0.031)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0169*4*1.05 = 0.071(ROE 6% per quarter), estimate highest/lowest PE = 31.82/19.14 (DPS 0.031)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0146*4*1.05 = 0.0613, estimate highest/lowest PE = 23.8/16.95 (DPS 0.031)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0162*4*1.05 = 0.068(5% increase), estimate highest/lowest PE = 15.93/14.16 (DPS 0.037)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.04*2 = 0.08, estimate highest/lowest PE = 14.3/11.5 (DPS 0.036)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0193*4 = 0.0772, estimate highest/lowest PE = 18.83/15.73 (DPS 0.036)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0659*1.1 = 0.0725, estimate highest/lowest PE = 18.4/15.64 (DPS 0.036)

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