KLCI Stock - NAIM / 5073 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	422,500,000 (Small)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(1.69-0.08)/0.1732 = 9.30 (Moderate)
Target Price	1.73+0.08 = 1.81 (PE 10.0, EPS 0.1732, DPS 0.08)
Decision	Not interested unless stock price selling at above 1.7 is low or stock price below SMA20 and got stronger buying volume than selling
Comment	Revenue decreased 8.8% and was third consecutive quarter decreasing and also lower than preceding year corresponding quarter 33.1%, eps decreased 46.5% and also lower than preceding year corresponding quarter 73.3%, cash generated from operating and financing more than enough to cover all expenses, stronger liquidity ratio from high to strong level now, higher gearing ratio from moderate to above moderate level now, all accounting ratio still acceptable, property development cost maintain high, property development division performance getting bad
First Support Price	1.68
Second Support Price	1.55
Risk Rating	MODERATE

Research House

TA Target Price	5.53 (2011-01-26)
Kenanga Target Price	4.2 (2011-03-01)
MIDF Target Price	4.65 (2011-03-01)
CIMB Target Price	2.73 (2011-05-13)
OSK Target Price	3.04 (2011-05-23)
AMMB Target Price	4.46 (2011-05-27)

Accounting Ratio

Return on Equity	8.45%
Dividend Yield	5.92%
Profit Margin	13.30%
Tax Rate	21.42%
Asset Turnover	0.3984
Net Asset Value Per Share	3.13
Net Tangible Asset per share	3.09
Price/Net Tangible Asset Per Share	0.57
Cash Per Share	0.9
Liquidity Current Ratio	5.2183
Liquidity Quick Ratio	3.603
Liquidity Cash Ratio	1.4168
Gearing Debt to Equity Ratio	0.7196
Gearing Debt to Asset Ratio	0.4135
Working capital per thousand Ringgit sale	123.7%
Days to sell the inventory	187
Days to collect the receivables	222
Days to pay the payables	110

Technical Analysis

SMA 20	1.677 (Uptrend 8 days)
SMA 50	1.708 (Downtrend)
SMA 100	1.762 (Downtrend)
SMA 200	2.126 (Downtrend)
MACD	-0.028364 (Uptrend 20 days)
MACD Histogram	0.017700 (Uptrend 14 days)

My notes based on 2011 quarter 3 report (number in '000):-
- Lower revenue and pbt mainly attributed by lower stages of completion achieved for the housing and construction projects. A majority of the existing construction projects was substantially completed and contributed minimal profit

- Its oil and gas associate, Dayang Enterprise Holdings Bhd (DEHB) continues to contribute positively to the earnings of the Group

- Lower pbt than FY11Q2 mainly due to the gain on partial disposal of equity interest in DEHB of about RM10 million reported in the preceding quarter

- Lower results is due in part to the sluggish demand for properties in Sarawak over the past two years amidst fears of overheating in the property sector affected by uncertainties over increasing cost of commodities, rising interest rates and decreasing purchasing power, inability to secure major construction contracts was also a contributing factor

- As early as June 2011, the Group launched Phase 7 of our Riveria Project in Kuching, the demand for our houses there exceeded expectations. In fact, the value of properties sold up to 3Q2011 of RM170 million exceeded sales of RM145 million achieved in the whole of previous year. This will translate into property revenue from 2012

- Estimate next 4Q eps after 2010 Q3 result announced = 0.0433*4 = 0.1732, estimate PE on current price 1.69 = 9.3(DPS 0.08)
- Estimate next 4Q eps after 2010 Q2 result announced = (0.0516+0.043)*2 = 0.1892(exclude RM10 million disposal gain), estimate highest/lowest PE = 10.15/7.93 (DPS 0.08)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.4023*0.85 = 0.342(0.4023 from recent fourth quarter eps), estimate highest/lowest PE = 7.19/5.38 (DPS 0.1)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0921*4*0.9 = 0.3316, estimate highest/lowest PE = 9.77/8.84 (DPS 0.1)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.2587*2*0.9 = 0.4657, estimate highest/lowest PE = 8.16/6.79 (DPS 0.1)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.1619*2*1.1 = 0.3562, estimate highest/lowest PE = 10.47/8.84 (DPS 0.1)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.2988 (10% drop from 0.332, due to profit decreasing), estimate highest/lowest PE = 11.28/8.57 (DPS 0.08)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0793*4 = 0.3172, estimate highest/lowest PE = 11.41/8.89 (DPS 0.08)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0902*4 = 0.3608, estimate highest/lowest PE = 9.87/6.59 (DPS 0.08)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0955*4 = 0.382, estimate highest/lowest PE = 8.04/6.73 (DPS 0.08)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0668*4 = 0.2672, estimate highest/lowest PE = 10.18/6.4 (DPS 0.13)
- Estimate next 4Q eps after 2008 Q4 result announced = 0.1118*4 = 0.4472, estimate highest/lowest PE = 4.07/2.17 (DPS 0.13)

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