KLCI Stock - BHIC / 8133 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	655,928,100 (Medium)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(2.64-0.065)/0.162 = 15.90 (High)
Target Price	1.94+0.065 = 2.01 (PE 12.0, EPS 0.162, DPS 0.065)
Decision	Not interested unless strong uptrend start above 2.77
Comment	Revenue increased 24.2% and was second consecutive quarter increasing but still lower than preceding year corresponding quarter 34.1%, eps decreased 275% and was fourth consecutive quarter decreasing (lower than preceding year corresponding quarter 109%), cash generated from operating enough for financing expenses and got more cash from borrowings to cover investing expenses, slightly weaker liquidity ratio at low level now, slightly lower gearing ratio at high level now, receivables & payables ratio still very high, lower receivables can indicate contract work reduce
First Support Price	2.6
Second Support Price	2.4
Risk Rating	HIGH

Research House

HwangDBS Target Price	5.15 (2011-08-15)
AMMB Target Price	4.3 (2011-11-16)

Accounting Ratio

Return on Equity	4.30%
Dividend Yield	2.46%
Profit Margin	-3.51%
Tax Rate	-
Asset Turnover	0.5158
Net Asset Value Per Share	1.7
Net Tangible Asset per share	1.69
Price/Net Tangible Asset Per Share	1.68
Cash Per Share	0.67
Liquidity Current Ratio	1.1576
Liquidity Quick Ratio	1.1063
Liquidity Cash Ratio	0.2495
Gearing Debt to Equity Ratio	1.6937
Gearing Debt to Asset Ratio	0.5995
Working capital per thousand Ringgit sale	16.9%
Days to sell the inventory	21
Days to collect the receivables	336
Days to pay the payables	204

My notes based on 2011 quarter 3 report (number in '000):-
- Lower revenue than FY10Q3 because in previous year’s corresponding period incorporated revenue for accumulation of work done on submarine maintenance

- Loss before tax mainly due to cost escalations in completing certain commercial shipbuilding projects, higher finance charges and lower share of profits from associates

- Higher revenue than FY11Q2 mainly due to contributions by defence related projects

- Boustead Naval Shipyard Sdn Bhd, the associate company’s negotiation for the contract to build the six Littoral Combatant Ships is at the advanced stage of preparations

- No estimate next 4Q eps after 2011 Q3 result announced, but if based on ROE of 2.14% per quarter then eps = 0.0405*4 = 0.162, estimate PE on current price 2.64 = 15.9(DPS 0.065)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.0405*4 = 0.162, estimate highest/lowest PE = 20.15/14.41 (DPS 0.065)
- Estimate next 4Q eps after 2011 Q1 result announced = (0.0405+0.046)*2*1.1 = 0.1903, estimate highest/lowest PE = 21.97/16.5 (DPS 0.065)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.3098*1.2 = 0.3718, estimate highest/lowest PE = 11.57/10.46 (DPS 0.06)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0636*1.1*4 = 0.2798 (10% increase due to many new contract received), estimate highest/lowest PE = 16.69/14.44 (DPS 0.06)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0631*4 = 0.2524*0.9 = 0.2272 (10% drop from 0.2524), estimate highest/lowest PE = 21.13/15.58 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0749*4 = 0.2996, estimate highest/lowest PE = 15.75/12.65 (DPS 0.06)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0996*4 = 0.3984, estimate highest/lowest PE = 12.66/11.16 (DPS 0.055)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0709*4 = 0.2836, estimate highest/lowest PE = 18.67/16.24 (DPS 0.055)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0616*4 = 0.2464, estimate highest/lowest PE = 19.99/12.68 (DPS 0.055)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.0602*4 = 0.2408, estimate highest/lowest PE = 13.89/9.7 (DPS 0.055)

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