KLCI Stock - AMWAY / 6351 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	1,479,470,805 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(9.0-0.62)/0.5326 = 15.73 (Moderate)
Target Price	9.59+0.62 = 10.21 (PE 18.0, EPS 0.5326, DPS 0.62)
Decision	BUY if stock price next uptrend start above 8.9
Comment	Revenue increased 25% and also higher than preceding year corresponding quarter 10.5%, eps increased 35.5% and also higher than preceding year corresponding quarter 19.9%, cash generated from operating is more than enough to cover all expenses, stronger liquidity ratio from low to moderate level now, lower gearing ratio at moderate level now, all accounting ratio are good, going to affect by strengthening of USD, possible of affect by weakening of consumer spending
First Support Price	8.9
Second Support Price	8.6
Risk Rating	MODERATE

Research House

OSK Target Price	9.86 (2011-08-11)
RHB Target Price	10 (2011-08-16)
TA Target Price	10.9 (2011-08-16)

Accounting Ratio

Return on Equity	36.78%
Dividend Yield	7.33%
Profit Margin	16.27%
Tax Rate	25.12%
Asset Turnover	2.123
Net Asset Value Per Share	1.41
Net Tangible Asset per share	1.38
Price/Net Tangible Asset Per Share	6.55
Cash Per Share	1.13
Liquidity Current Ratio	2.1421
Liquidity Quick Ratio	1.7039
Liquidity Cash Ratio	1.5971
Gearing Debt to Equity Ratio	0.5007
Gearing Debt to Asset Ratio	0.3336
Working capital per thousand Ringgit sale	17.9%
Days to sell the inventory	31
Days to collect the receivables	6
Days to pay the payables	66

My notes based on 2011 quarter 3 report (number in '000):-
- Higher revenue and pbt due to various sales and marketing program implemented and improved gross margin arising from the favorable foreign exchange impact

- Estimate next 4Q eps after 2011 Q3 result announced = 0.5072*1.05 = 0.5326, estimate PE on current price 9 = 15.73(DPS 0.62)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.4988*0.95 = 0.4739, estimate highest/lowest PE = 18.23/16.33 (DPS 0.62)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.5142*0.97 = 0.4988, estimate highest/lowest PE = 18.4/16.32 (DPS 0.66)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.4761*1.08 = 0.5142, estimate highest/lowest PE = 17.64/14.86 (DPS 0.66)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.3335+(0.1246*1.2) = 0.5497, estimate highest/lowest PE = 15.21/13.46 (DPS 0.64)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.3335+(0.1246*1.2) = 0.5497, estimate highest/lowest PE = 14.04/13.43 (DPS 0.52)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.3261+(0.099*1.1) = 0.4676(Correction to preceding Q estimated), estimate highest/lowest PE = 16.3/14.71 (DPS 0.5)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0996*4 = 0.3984, estimate highest/lowest PE = 17.62/16.99 (DPS 0.48)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1246*4 = 0.4984, estimate highest/lowest PE = 13.98/13.46 (DPS 0.48)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.099*4 = 0.396, estimate highest/lowest PE = 17.6/16.92 (DPS 0.5)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.118*4 = 0.472, estimate highest/lowest PE = 14.79/13.73 (DPS 0.52)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.1332*4 = 0.5328, estimate highest/lowest PE = 13.06/11.75 (DPS 0.54)

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