KLCI Stock - MBMR / 5983 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	752,951,767 (Medium)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(3.1-0.13)/0.4606 = 6.45 (Moderate)
Target Price	3.68+0.13 = 3.81 (PE 8.0, EPS 0.4606, DPS 0.13)
Decision	Not interested unless stock price can sustain at 3.2
Comment	Revenue decreased 6.8% and also lower than preceding year corresponding quarter 5.6%, eps decreased 45% and also lower than preceding year corresponding quarter 45.6%, cash generated from operating and investing is more than enough to cover all expenses, stronger liquidity ratio at high level now, lower gearing ratio at below moderate level, all accounting ratio are good, impacting by uptrend of currency JPY and shortage of parts supply as a result of the earthquake in Japan, benefit from new launched of Myvi
First Support Price	2.95
Second Support Price	2.75
Risk Rating	MODERATE

Research House

HwangDBS Target Price	4.15 (2011-01-10)
Maybank Target Price	5 (2011-01-24)
Affin Target Price	3.45 (2011-06-03)
OSK Target Price	3.8 (2011-06-08)
RHB Target Price	3.75 (2011-06-08)
MIDF Target Price	3.6 (2011-08-12)

Accounting Ratio

Return on Equity	10.41%
Dividend Yield	4.52%
Profit Margin	7.60%
Tax Rate	12.10%
Asset Turnover	1.1111
Net Asset Value Per Share	4.31
Net Tangible Asset per share	4.25
Price/Net Tangible Asset Per Share	0.7
Cash Per Share	0.91
Liquidity Current Ratio	3.2284
Liquidity Quick Ratio	2.2091
Liquidity Cash Ratio	1.2671
Gearing Debt to Equity Ratio	0.2015
Gearing Debt to Asset Ratio	0.1509
Working capital per thousand Ringgit sale	24.9%
Days to sell the inventory	44
Days to collect the receivables	36
Days to pay the payables	36

My notes based on 2011 quarter 2 report (number in '000):-
- Subsidiary Federal Auto Holdings Berhad, recorded substantial increases in sales from its dealerships for European makes, Volvo and Volkswagen

- According to the Malaysian Automotive Association (MAA), the Malaysian motor total industry volume (TIV) of sales by registration declined in the second quarter of 2011 by 9.7% compared against the same period of 2010, which resulted in an overall decline in TIV for the six months by 1.3%. The Group's overall total vehicle sales also declined in the second quarter of 2011 and for six months by 13.4% and 4.8% respectively compared against the same period of 2010

- The Group’s overall performance was impacted by the shortage of parts supply as a result of the earthquake in Japan

- Estimate next 4Q eps after 2011 Q2 result announced = 0.2424*2*0.95 = 0.4606, estimate PE on current price 3.1 = 6.45(DPS 0.13)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.571, estimate highest/lowest PE = 5.52/4.71 (DPS 0.13)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.1154*4*0.9 = 0.4154, estimate highest/lowest PE = 7.73/6.76 (DPS 0.13)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1399*4*0.9 = 0.5036, estimate highest/lowest PE = 6.77/5.7 (DPS 0.08)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.5049*0.9 = 0.4544, estimate highest/lowest PE = 7.22/6.45 (DPS 0.08)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.4772 (base on year 2008 eps), estimate highest/lowest PE = 6.71/5.53 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0931*4 = 0.3724, estimate highest/lowest PE = 8.4/6.69 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0916*4 = 0.3664, estimate highest/lowest PE = 7.21/6.39 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0568*4 = 0.2272, estimate highest/lowest PE = 10.65/8.98 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0381*4 = 0.1524, estimate highest/lowest PE = 14.37/12.6 (DPS 0.18)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.0672*4 = 0.2688, estimate highest/lowest PE = 8.59/6.58 (DPS 0.18)

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