KLCI Stock - HSPLANT / 5138 - 2010 Quarter 2

Company Info

Market Capital (Capital Size)	2,160,000,000 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(2.7-0.17)/0.3342 = 7.57 (Moderate)
Target Price	4.68+0.17 = 4.85 (PE 14.0, EPS 0.3342, DPS 0.17)
Decision	BUY if stock price sustain and next uptrend start above 2.55
Comment	Revenue increased 26.6% and also higher than preceding year corresponding quarter 80.9%, eps increased 31.4% and was fourth consecutive quarter increasing (higher than preceding year corresponding quarter 109%), cash generated from operating is more than enough to cover all expenses, stronger liquidity ratio at high level now, lower gearing ratio at low level now, all accounting periods are good, CPO price rebound to above 3k, monthly production increasing
First Support Price	2.55
Second Support Price	2.35
Risk Rating	MODERATE

Research House

Affin Target Price

4.02 (2011-01-27)

Accounting Ratio

Return on Equity	12.87%
Dividend Yield	6.30%
Profit Margin	56.05%
Tax Rate	25.75%
Asset Turnover	0.2877
Net Asset Value Per Share	2.3
Net Tangible Asset per share	2.3
Price/Net Tangible Asset Per Share	1.15
Cash Per Share	0.15
Liquidity Current Ratio	3.5539
Liquidity Quick Ratio	2.9289
Liquidity Cash Ratio	2.4049
Gearing Debt to Equity Ratio	0.1302
Gearing Debt to Asset Ratio	0.1152
Working capital per thousand Ringgit sale	20.7%
Days to sell the inventory	38
Days to collect the receivables	15
Days to pay the payables	43

My notes based on 2011 quarter 2 report (number in '000):-
- Higher revenue and pbt due to strong commodity prices and achieved average selling price of Crude Palm Oil (CPO) and Palm Kernel (PK) for the current quarter of RM3,372 and RM2,497 per tonne which were higher than the preceding year corresponding quarter of RM2,499 and RM1,455 per tonne respectively.

- In addition, the better performance was also contributed by higher CPO and PK sales volume for the current quarter of 43,728 tonnes and 10,466 tonnes which were 28% and 52% respectively higher than the preceding year corresponding quarter attributable to higher CPO production with higher Fresh Fruit Bunches (FFB) yield resulting from the changes in cropping pattern and increase in the purchase of FFB

- Estimate next 4Q eps after 2011 Q2 result announced = (0.0949+0.0722)*2 = 0.3342, estimate PE on current price 2.7 = 7.57(DPS 0.13)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.2392*1.1 = 0.2631, estimate highest/lowest PE = 9.96/8 (DPS 0.13)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0521*1.1*4 = 0.2292, estimate highest/lowest PE = 13.57/11.21 (DPS 0.13)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0521*1.1*4 = 0.2292, estimate highest/lowest PE = 15.44/12.48 (DPS 0.11)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0454*1.1*4 = 0.1998, estimate highest/lowest PE = 15.42/10.76 (DPS 0.11)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0456*1.1*4 = 0.2006, estimate highest/lowest PE = 11.42/10.02 (DPS 0.09)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0396*4 = 0.1584, estimate highest/lowest PE = 15.4/12.31 (DPS 0.09)

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