KLCI Stock - MRCB / 1651 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	2,702,797,540 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(1.95-0.015)/0.0811 = 23.86 (High)
Target Price	1.46+0.015 = 1.47 (PE 18.0, EPS 0.0811, DPS 0.015)
Decision	Not interested unless revenue and profit increase more
Comment	Revenue increased 6% and higher than preceding year corresponding quarter 35.1%, eps decreased 12.2% and was second consecutive quarter decreasing but higher than preceding year corresponding quarter 53.9%, no cash generated from operating and cash generated from borrowings also not enough to cover all expenses hence spent 50.5% of Group cash, stronger liquidity ratio at moderate level now, higher gearing ratio at very high level now, all accounting ratio also at high level, major profit contribution from property development division and was largely growth but others mostly also recorded lower performance
First Support Price	1.9
Second Support Price	1.8
Risk Rating	MODERATE

Research House

CIMB Target Price	3 (2011-02-10)
AMMB Target Price	2.4 (2011-04-08)
UOB Target Price	3.02 (2011-07-11)
RHB Target Price	2.65 (2011-07-29)
OSK Target Price	3.13 (2011-08-02)
HwangDBS Target Price	3.25 (2011-08-12)
Kenanga Target Price	3.44 (2011-08-17)
MIDF Target Price	2.66 (2011-08-17)

Accounting Ratio

Return on Equity	6.44%
Dividend Yield	0.77%
Profit Margin	10.30%
Tax Rate	15.61%
Asset Turnover	0.2499
Net Asset Value Per Share	0.95
Net Tangible Asset per share	0.91
Price/Net Tangible Asset Per Share	2.45
Cash Per Share	0.45
Liquidity Current Ratio	2.3476
Liquidity Quick Ratio	1.8541
Liquidity Cash Ratio	0.7589
Gearing Debt to Equity Ratio	2.4929
Gearing Debt to Asset Ratio	0.7081
Working capital per thousand Ringgit sale	95.9%
Days to sell the inventory	140
Days to collect the receivables	282
Days to pay the payables	280

My notes based on 2011 quarter 2 report (number in '000):-
- Higher revenue due to higher contribution from the Group’s revenue recognition of ongoing and encouraging strata office sales of property development projects at Kuala Lumpur Sentral and the progressive works of the construction and engineering activities. Lower revenue was noted from the infrastructure and environmental segment due to completion of existing environmental projects, with continuation of new phases pending relevant authority approval

- The higher profit for the current quarter was mainly contributed by recognition of progress profit from the ongoing property development projects at Kuala Lumpur Sentral. The recent launch of strata office sales at Kuala Lumpur Sentral, which is known as Q Sentral has begun to register meaningful contribution. Profit was also boosted by the construction activities in Johor Darul Takzim, in particular the Permai Hospital, Eastern Dispersal Link Highway and Marlborough College

- Estimate next 4Q eps after 2011 Q2 result announced = 0.0811, estimate PE on current price 1.95 = 23.86(DPS 0.015)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0156*4*1.3 = 0.0811, estimate highest/lowest PE = 31.87/24.11 (DPS 0.015)
- Estimate next 4Q eps after 2010 Q4 result announced = 1067579*1.3*0.09/1380582 = 0.0905(profit margin per 9%, revenue yearly increase rate 30%), estimate highest/lowest PE = 26.02/21.49 (DPS 0.015)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0188*4*1.1 = 0.0827(profit margin 8%, revenue increase rate 20%), estimate highest/lowest PE = 29.02/22.61 (DPS 0.01)
- Estimate next 5Q eps after 2010 Q2 result announced = 0.0129,0.0175,0.0202,0.0237,0.0313(calculation is based on receivables, revenue, 8% profit margin and 27% tax rate), exclude 0.0129 then cum_eps is 0.0927, estimate highest/lowest PE = 24.49/17.26 (DPS 0.01)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0743, estimate highest/lowest PE = 23.96/18.03 (DPS 0.01)

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