KLCI Stock - BSTEAD / 2771 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	5,443,540,869 (Very Large)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(5.79-0.32)/0.5401 = 10.13 (Moderate)
Target Price	7.02+0.32 = 7.34 (PE 13.0, EPS 0.5401, DPS 0.32)
Decision	BUY if stock price next uptrend start above 5.5
Comment	Revenue decreased 1.6% but higher than preceding year corresponding quarter 44.6%, eps decreased 34.7% and was third consecutive quarter decreasing but still higher than preceding year corresponding quarter 30.8%, cash generated from operating not enough for financing expenses hence increased borrowings to cover other expenses and still got extra, weaker liquidity ratio at weak level now, slightly lower gearing ratio at high level now, all accounting ratio are good, CPO price in uptrend
First Support Price	5.5
Second Support Price	5.2
Risk Rating	MODERATE

Research House

CIMB Target Price	2.79 (2011-11-22)
ECM Target Price	6.41 (2011-11-22)
AMMB Target Price	4.3 (2011-12-19)
HLG Target Price	6.5 (2011-12-19)
HwangDBS Target Price	6.8 (2011-12-19)
TA Target Price	6.21 (2011-12-21)

Accounting Ratio

Return on Equity	12.85%
Dividend Yield	5.53%
Profit Margin	7.63%
Tax Rate	13.64%
Asset Turnover	0.6691
Net Asset Value Per Share	4.63
Net Tangible Asset per share	2.86
Price/Net Tangible Asset Per Share	1.86
Cash Per Share	0.62
Liquidity Current Ratio	0.6149
Liquidity Quick Ratio	0.5024
Liquidity Cash Ratio	0.1095
Gearing Debt to Equity Ratio	1.4952
Gearing Debt to Asset Ratio	0.5667
Working capital per thousand Ringgit sale	-26.5%
Days to sell the inventory	31
Days to collect the receivables	99
Days to pay the payables	87

Technical Analysis

SMA 20	5.438 (Uptrend 18 days)
SMA 50	5.318 (Uptrend)
SMA 100	5.187 (Uptrend)
SMA 200	5.357 (Uptrend)
MACD	0.124877 (Uptrend 8 days)
MACD Histogram	0.051948 (Uptrend 53 days)

My notes based on 2011 quarter 3 report (number in '000):-
- Higher revenue and pbt than FY10Q3 due to higher sales volume for the Manufacturing & Trading Division, while the Plantation Division's revenue had also increased by 26% mainly on stronger palm product prices and consolidation of Pharmaniaga in Pharmaceutical Division

- Lower revenue and pbt in Heavy division than FY10Q3 due to the work on the second generation patrol vessels remained at the preliminary stage, higher interest expense and cost escalations in completing certain commercial shipbuilding projects

- Lower pbt than FY11Q2 due to previous quarter had included a RM94.6 million gain from the disposal of plantation assets

- Plantation Division’s pre-tax profit was better than FY11Q2 was boosted by RM14 million dividend income from Boustead REIT, while the 5% increase in FFB crop helped to cushion against a 5% decline in CPO price

- Estimate next 4Q eps after 2011 Q3 result announced = 0.1286*4*1.05 = 0.5401, estimate PE on current price 5.79 = 10.13(DPS 0.32)
- Estimate next 4Q eps after 2011 Q2 result announced = (0.1+0.12)*2 = 0.44, estimate highest/lowest PE = 12.11/9.48 (DPS 0.32)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.5557, estimate highest/lowest PE = 10.94/8.53 (DPS 0.42)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.2646*2*1.05 = 0.5557(exclude RM52 million one off gained), estimate highest/lowest PE = 10.08/8.8 (DPS 0.39)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1*4*1.1 = 0.44, estimate highest/lowest PE = 13.11/11.14 (DPS 0.37)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.08*4*1.05 = 0.336(0.08 is eps exclude non-repeatable income), estimate highest/lowest PE = 17.04/11.59 (DPS 0.325)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.4699*1.05 = 0.4934(5% increase), estimate highest/lowest PE = 8.3/6.58 (DPS 0.275)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.4934, estimate highest/lowest PE = 7.1/6.31 (DPS 0.275)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1241*4 = 0.4964, estimate highest/lowest PE = 6.89/6.06 (DPS 0.25)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0721*4 = 0.2884, estimate highest/lowest PE = 12.17/10.92 (DPS 0.2)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0934*4 = 0.3736, estimate highest/lowest PE = 11.78/8.94 (DPS 0.2)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.1699*4 = 0.6796, estimate highest/lowest PE = 5.15/3.97 (DPS 0.3)

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