KLCI Stock - F&N / 3689 - 2011 Quarter 4

Company Info

Market Capital (Capital Size)	6,334,845,525 (Very Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(17.56-0.72)/0.8174 = 20.60 (High)
Target Price	14.71+0.72 = 15.43 (PE 18.0, EPS 0.8174, DPS 0.72)
Decision	Not interested unless stock price sustain and uptrend above 16.8
Comment	Revenue increased 12.8% and also higher than preceding year corresponding period 0.5%, eps decreased 14.9% and was second consecutive quarter decreasing and also lower than preceding year corresponding quarter 18.1%, cash generated from operating not enough to cover dividend nor investing activities hence spent 69.1% of Group cash to cover, slightly stronger liquidity ratio at low level now, lower gearing ratio from above moderate to moderate level now, all accounting ratio are good, affecting by high skimmed milk powder and sugar price increasing and Coca-Cola business cease on October
First Support Price	17.5
Second Support Price	16.8
Risk Rating	MODERATE

Research House

Maybank Target Price	15.25 (2011-05-09)
MIDF Target Price	18.75 (2011-05-09)
TA Target Price	18.91 (2011-05-09)
CIMB Target Price	13.1 (2011-08-08)
AMMB Target Price	20.4 (2011-10-12)

Accounting Ratio

Return on Equity	24.57%
Dividend Yield	4.10%
Profit Margin	7.44%
Tax Rate	10.57%
Asset Turnover	1.5815
Net Asset Value Per Share	4.31
Net Tangible Asset per share	3.96
Price/Net Tangible Asset Per Share	4.33
Cash Per Share	0.8
Liquidity Current Ratio	1.7755
Liquidity Quick Ratio	1.2329
Liquidity Cash Ratio	0.4047
Gearing Debt to Equity Ratio	0.5881
Gearing Debt to Asset Ratio	0.3703
Working capital per thousand Ringgit sale	14.2%
Days to sell the inventory	41
Days to collect the receivables	50
Days to pay the payables	72

My notes based on 2011 quarter 4 report (number in '000):-
- Group revenue for Q4 was flat against that of last year(“LY’) which had included the revenue from the sale of Ampang development project of RM54 million. Excluding this, revenue from the F&B business recorded positive growth of +6% spurred by strong sales momentum in the soft drinks and dairies Thailand units

- Group operating profit declined 34% against LY. Excluding the profit of RM24 million mainly from the sale of Ampang development project recorded LY, F&B profit was down 12% after a RM11
million provision made during Q4 in respect of potential royalty underpayment in relation to prior years

- Lower pbt than FY11Q3 mainly due to the provision of RM11 million made during the quarter 4 in respect of potential royalty underpayment by the dairies division

- Estimate next 4Q eps after 2011 Q4 result announced = 0.2151*4*0.95 = 0.8174, estimate PE on current price 17.56 = 20.6(DPS 0.72)
- Estimate next 4Q eps after 2011 Q3 result announced = (0.3+0.2151)*2*0.7 = 0.7211, estimate highest/lowest PE = 25.64/21.43 (DPS 0.41)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.3*4 = 1.2(exclude RM53 million from sale of property income), estimate highest/lowest PE = 16.02/14.52 (DPS 0.58)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.2*4 = 0.8(around 5% ROE), estimate highest/lowest PE = 22.09/18.07 (DPS 0.545)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.875*0.95 = 0.8313, estimate highest/lowest PE = 17.58/15.82 (DPS 1.645)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.8236(correction), estimate highest/lowest PE = 17.53/15.85 (DPS 0.465)
- Estimate next 4Q eps after 2010 Q2 result announced = 1.0072(10% grow from 0.4578*2), estimate highest/lowest PE = 14.43/10.18 (DPS 0.465)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.961(10% grow from 0.2184*4), estimate highest/lowest PE = 11.06/10.44 (DPS 0.47)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.8195, estimate highest/lowest PE = 13.58/12.04 (DPS 0.47)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.8, estimate highest/lowest PE = 12.79/11.29 (DPS 0.47)

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