KLCI Stock - LATEXX / 7064 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	423,395,373 (Small)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(1.9-0.05)/0.2601 = 7.11 (Moderate)
Target Price	2.60+0.05 = 2.65 (PE 10.0, EPS 0.2601, DPS 0.05)
Decision	BUY if stock price sustain above 1.8
Comment	Revenue decreased 9.3% and also lower than preceding year corresponding quarter 6.2%, eps decreased 25.4% and also lower than preceding year corresponding quarter 26.1%, cash generated from operating more than enough to cover all expenses, weaker liquidity ratio at low level now, lower gearing ratio at above moderate level now, all accounting ratio are good, benefit from latex price decreasing and strengthening of USD VS RM but affect by increasing of nitrile price
First Support Price	1.8
Second Support Price	1.6
Risk Rating	MODERATE

Research House

CIMB Target Price

2.05 (2011-11-22)

Accounting Ratio

Return on Equity	20.18%
Dividend Yield	2.63%
Profit Margin	11.60%
Tax Rate	9.91%
Asset Turnover	0.972
Net Asset Value Per Share	1.08
Net Tangible Asset per share	1.0
Price/Net Tangible Asset Per Share	1.87
Cash Per Share	0.26
Liquidity Current Ratio	1.6173
Liquidity Quick Ratio	1.1311
Liquidity Cash Ratio	0.492
Gearing Debt to Equity Ratio	0.7203
Gearing Debt to Asset Ratio	0.4187
Working capital per thousand Ringgit sale	17.8%
Days to sell the inventory	61
Days to collect the receivables	67
Days to pay the payables	83

Technical Analysis

SMA 20	1.899 (Downtrend 2 days)
SMA 50	1.839 (Uptrend)
SMA 100	1.669 (Downtrend)
SMA 200	2.026 (Downtrend)
MACD	0.060509 (Downtrend 2 days)
MACD Histogram	-0.008531 (Downtrend 12 days)

My notes based on 2011 quarter 3 report (number in '000):-
- The decrease in the Group's revenue and the net profit was mainly due to the persistently high raw material prices and the weaker foreign exchange rate of USD

- Estimate next 4Q eps after 2011 Q3 result announced = 0.0502*4*1.3 = 0.261, estimate PE on current price 1.9 = 7.11(DPS 0.05)
- Estimate next 4Q eps after 2011 Q2 result announced = (0.0483+0.0673)*2*1.05 = 0.2428, estimate highest/lowest PE = 8.53/4.61 (DPS 0.05)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0483*4*1.1 = 0.2125, estimate highest/lowest PE = 11.86/7.18 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.2751*0.95 = 0.2613, estimate highest/lowest PE = 10.62/8.78 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.3043*0.95 = 0.289, estimate highest/lowest PE = 9.91/8.15 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0824*4 = 0.3296+0.012(QbQ improvement adjustment) = 0.3416, estimate highest/lowest PE = 10.47/6.72 (DPS 0.075)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0792*4 = 0.3168+0.02(QbQ improvement adjustment) = 0.3368, estimate highest/lowest PE = 11.46/9.62 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0675*4 = 0.27+0.02(QbQ improvement adjustment) = 0.29, estimate highest/lowest PE = 14.62/12.14 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0566*4 = 0.2264, estimate highest/lowest PE = 21.78/10.42 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0586*4 = 0.2344, estimate highest/lowest PE = 11.99/7.81 (DPS 0.02)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.047*4 = 0.188, estimate highest/lowest PE = 10.37/4.2 (DPS 0.02)

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