KLCI Stock - LPI / 8621 - 2011 Quarter 4

Company Info

Market Capital (Capital Size)	2,961,314,852 (Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(13.38-0.75)/0.7497 = 16.85 (Moderate)
Target Price	13.49+0.75 = 14.24 (PE 18.0, EPS 0.7497, DPS 0.75)
Decision	BUY if MACD and signal start moving back to uptrend and got stronger buying volume than selling
Comment	Revenue increased 1.2% and was fourth consecutive quarter increasing (higher than preceding year corresponding quarter 25.5%), eps decreased 12.8% but higher than preceding year corresponding quarter 6.8%, not enough cash for operating expenses hence increased borrowing and spent 30.9% of Group cash to cover all expenses, stronger liquidity ratio at very strong level now, lower gearing ratio but still at high level now, general insurance revenue and profit increasing
First Support Price	13.3
Second Support Price	12.5
Risk Rating	MODERATE

Research House

OSK Target Price	13.6 (2011-10-07)
RHB Target Price	11.6 (2012-01-10)

Accounting Ratio

Return on Equity	13.08%
Dividend Yield	5.61%
Profit Margin	21.73%
Tax Rate	24.36%
Asset Turnover	0.3754
Net Asset Value Per Share	5.36
Net Tangible Asset per share	5.36
Price/Net Tangible Asset Per Share	2.58
Cash Per Share	1.89
Liquidity Current Ratio	5.9659
Liquidity Quick Ratio	4.0625
Liquidity Cash Ratio	1.9323
Gearing Debt to Equity Ratio	1.0356
Gearing Debt to Asset Ratio	0.5087
Working capital per thousand Ringgit sale	118.2%
Days to sell the inventory	299
Days to collect the receivables	185
Days to pay the payables	121

Technical Analysis

SMA 20	13.442 (Downtrend 6 days)
SMA 50	13.164 (Uptrend)
SMA 100	12.603 (Uptrend)
SMA 200	12.725 (Uptrend)
MACD (26d/12d)	0.064559 ( 0.010365 )
Signal (9)	0.093426 ( 0.007217 )
MACD Histogram	0.028867 (Bearish trend 19 days)

My notes based on 2011 quarter 4 report (number in '000):-
- Higher revenue mainly contributed by higher gross earned premium

- Higher pbt than FY10Q4 due to growth in the gross earned premium and lower net commission expense

- Lower pbt than FY11Q3 mainly due to higher investment income received in the preceding quarter. The current quarter‟s results was also negatively impacted by the huge losses incurred by the Malaysian Motor Insurance Pool (MMIP), which was formed to cater for unplaced motor risks. All licensed general insurers have an equal share of participation in the pool. Our share of loss through the MMIP was RM11.1 million. This resulted in an increase in our motor loss ratio to 81.1% and dampened underwriting profits

- Estimate next 4Q eps after 2010 Q4 result announced = 0.1785*4*1.05 = 0.7497, estimate PE on current price 13.38 = 16.85(DPS 0.75)
- Estimate next 4Q eps after 2010 Q3 result announced = (0.2048+0.1426)*2 = 0.6948, estimate highest/lowest PE = 18.94/15.98 (DPS 0.7)
- Estimate next 4Q eps after 2010 Q2 result announced = (0.1754+0.1426)*2*1.05 = 0.6678, estimate highest/lowest PE = 20.22/16.05 (DPS 0.7)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.1754*4*1.1 = 0.7718, estimate highest/lowest PE = 17.19/16.65 (DPS 0.55)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.6383*1.1 = 0.7021, estimate highest/lowest PE = 19.27/17.73 (DPS 0.55)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.1685*4*1.05 = 0.7077, estimate highest/lowest PE = 19.57/15.42 (DPS 0.37)
- Estimate next 4Q eps after 2010 Q2 result announced = 1.0303(10% grow from 0.9366), estimate highest/lowest PE = 17.46/15.5 (DPS 0.5125)
- Estimate next 4Q eps after 2010 Q1 result announced = 1.0303(10% grow from 0.9366), estimate highest/lowest PE = 15.15/12.76 (DPS 0.675)
- Estimate next 4Q eps after 2009 Q4 result announced = 1.0533(15% grow from 0.9159), estimate highest/lowest PE = 12.94/11.53 (DPS 0.675)
- Estimate next 4Q eps after 2009 Q3 result announced = 1.0253, estimate highest/lowest PE = 13.23/11.16 (DPS 0.74)
- Estimate next 4Q eps after 2009 Q2 result announced = 1.0204, estimate highest/lowest PE = 11.43/10.25 (DPS 0.74)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.979, estimate highest/lowest PE = 10.88/8.63 (DPS 0.85)

LPI latest news (English)

LPI latest news (Chinese)