KLCI Stock - NOTION / 0083 - 2011 Quarter 4

Company Info

Market Capital (Capital Size)	264,299,956 (Small)
Par Value	RM 0.50

My Analysis

Forecast P/E now	(1.71-0.03)/0.1017 = 16.52 (High)
Target Price	1.02+0.03 = 1.05 (PE 10.0, EPS 0.1017, DPS 0.03)
Decision	Not interested unless stock price below SMA20 and sell volume is low compare to buy
Comment	Revenue increased 1.8% and was second consecutive quarter increasing and also higher than preceding year corresponding quarter 20.2%, eps increased 23.3% and also higher than preceding year corresponding quarter 43.2%, cash generated from operating enough to cover financing repayment but cash generated from financing not enough to cover investing expenses hence spent 30.6% of Group cash, weaker liquidity at moderate level now, slightly higher gearing ratio at moderate level now, all accounting ratio are good, affecting by Thailand flood
First Support Price	1.6
Second Support Price	1.5
Risk Rating	MODERATE

Research House

HwangDBS Target Price	2.5 (2011-01-24)
ECM Target Price	2.43 (2011-08-15)
OSK Target Price	1.71 (2011-09-27)
HLG Target Price	2.58 (2011-11-24)
Maybank Target Price	1.5 (2011-11-24)
RHB Target Price	1.21 (2012-01-04)

Accounting Ratio 

Return on Equity	17.38%
Dividend Yield	1.75%
Profit Margin	23.04%
Tax Rate	12.95%
Asset Turnover	0.5743
Net Asset Value Per Share	1.74
Net Tangible Asset per share	1.74
Price/Net Tangible Asset Per Share	0.88
Cash Per Share	0.16
Liquidity Current Ratio	2.1578
Liquidity Quick Ratio	1.519
Liquidity Cash Ratio	0.354
Gearing Debt to Equity Ratio	0.5316
Gearing Debt to Asset Ratio	0.3461
Working capital per thousand Ringgit sale	33.6%
Days to sell the inventory	83
Days to collect the receivables	107
Days to pay the payables	61

Technical Analysis 

SMA 20	1.641 (Uptrend 11 days)
SMA 50	1.609 (Uptrend)
SMA 100	1.646 (Downtrend)
SMA 200	1.87 (Downtrend)
MACD	0.025046 (Uptrend 12 days)
MACD Histogram	0.035147 (Uptrend 62 days)

My notes based on 2011 quarter 4 report (number in '000):-
- In Q4FY2011, HDD parts revenue recorded RM20.8 million (Q3FY2011 : RM21.7 million), camera parts recorded RM30.9 million (Q3FY2011 : RM29.2 million) whilst the industrial/automotive revenue was at RM10.2 million (Q3FY2011 : RM9.9 million). The product mix for Q4FY2011 was HDD : Camera : Industrial/Automotive of 34% : 50% : 16% compared to previous quarter’s mix of 36% : 48% : 16%

- Q1 FY2012 will see reduction of revenue of up to 40% against normal quarter and will most probably be loss making due to the reduced revenue and provisioning for the losses sustained during the flood in Notion Thailand

- Estimate next 4Q eps after 2011 Q4 result announced = (0.3033-0.1)*0.5 = 0.1017, estimate PE on current price 1.71 = 16.52(DPS 0.03)
- Estimate next 4Q eps after 2011 Q3 result announced = 0.24*0.9 = 0.216, estimate highest/lowest PE = 8.98/6.2 (DPS 0.06)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.24, estimate highest/lowest PE = 9.13/7.04 (DPS 0.06)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.06*4 = 0.24, estimate highest/lowest PE = 9.6/6.81 (DPS 0.045)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0523*4*0.9 = 0.1883, estimate highest/lowest PE = 11.44/8.2 (DPS 0.045)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0192*3+0.0806 = 0.1382(It may take 3Q to apply corrective measures to control costs, minimise rejects and maximise its production capacity), estimate highest/lowest PE = 15.16/10.67 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.3788 (0.1804*2 = 0.3608, 5% grow from 0.3608), estimate highest/lowest PE = 8.65/5.24 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.3674, estimate highest/lowest PE = 9.44/7.57 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0185*4 = 0.074, estimate highest/lowest PE = 11.62/9.95 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0158*4 = 0.0632, estimate highest/lowest PE = 8.39/5.49 (DPS 0.01)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0065*4 = 0.026, estimate highest/lowest PE = 13.46/9.23 (DPS 0.01)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0103*4 = 0.0412, estimate highest/lowest PE = 6.8/3.64 (DPS 0.01)

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