KLCI Stock - TSH / 9059 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	1,574,078,035 (Large)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(1.91-0.05)/0.1682 = 11.06 (Moderate)
Target Price	2.19+0.05 = 2.24 (PE 13.0, EPS 0.1682, DPS 0.05)
Decision	BUY if stock price sustain above 1.85
Comment	Revenue decreased 17.2% but higher than preceding year corresponding quarter 27.5%, eps decreased 4% but higher than preceding year corresponding quarter 89.4%, cash generated from operating enough to cover financing expenses but not for investing expenses hence spent 27% of Group cash to cover, slightly weaker liquidity ratio at weak level now, higher gearing ratio at high level now, all accounting ratio are good, lower inventory can indicate decrease of demand, going to benefit from rebound of CPO price above 3000
First Support Price	1.85
Second Support Price	1.6
Risk Rating	MODERATE

Research House

AMMB Target Price	1.14 (2011-02-16)
HwangDBS Target Price	2.18 (2011-09-12)
HLG Target Price	1.76 (2011-10-21)
Maybank Target Price	2.19 (2011-11-18)
MIDF Target Price	2.25 (2011-11-18)
OSK Target Price	2.21 (2011-12-02)

Accounting Ratio

Return on Equity	15.22%
Dividend Yield	3.14%
Profit Margin	17.22%
Tax Rate	19.10%
Asset Turnover	0.5663
Net Asset Value Per Share	2.05
Net Tangible Asset per share	1.93
Price/Net Tangible Asset Per Share	1.87
Cash Per Share	0.14
Liquidity Current Ratio	0.6598
Liquidity Quick Ratio	0.3518
Liquidity Cash Ratio	0.0964
Gearing Debt to Equity Ratio	1.1933
Gearing Debt to Asset Ratio	0.5149
Working capital per thousand Ringgit sale	-18.7%
Days to sell the inventory	70
Days to collect the receivables	43
Days to pay the payables	58

My notes based on 2011 quarter 3 report (number in '000):-
- Palm and Bio-Integration business segment continued to yield good results due to higher crop production arising mainly from higher yield and increase in mature plantation field in Indonesia. The good performance was also partly attributed to mill operation which continued to show high efficiency, hence able to generate a higher oil extraction rate. The Cocoa Manufacturing segment reported a lower profit due to lower production and unfavourable cocoa butter price. As for the Wood Products segment, the increased loss was attributable to the decline in sale volume and gross margin and downsizing of overseas operations

- Estimate next 4Q eps after 2010 Q3 result announced = 0.0841*4/2 = 0.1682, estimate PE on current price 1.91 = 11.06(DPS 0.06)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0876*4*0.9 = 0.3154, estimate highest/lowest PE = 12.18/8.56 (DPS 0.06)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0583*4*0.9 = 0.2099, estimate highest/lowest PE = 15.2/13.29 (DPS 0.06)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.2068*4*1.2 = 0.2482, estimate highest/lowest PE = 11.2/10.44 (DPS 0.06)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0444*4*1.1 = 0.1954, estimate highest/lowest PE = 14.84/11.41 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.033*4 = 0.132, estimate highest/lowest PE = 21.21/13.94 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.1938*0.95 = 0.1841, estimate highest/lowest PE = 10.59/8.8 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.1802*1.1 = 0.1982, estimate highest/lowest PE = 10.65/8.78 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0568*4*0.95 = 0.2158, estimate highest/lowest PE = 10.66/7.92 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.055*4*0.8 = 0.176, estimate highest/lowest PE = 10.97/8.35 (DPS 0.05)

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