KLCI Stock - MRCB / 1651 - 2011 Quarter 3

Company Info 

Listing Date	1971-03-22
Market Capital (Capital Size)	3,105,352,514 (Large)
Par Value	RM 1.00
Board	Main
Sector	Construction
Major Industry	Property Development
Sub Industry	Construction & Project Management
Website	http://www.mrcb.com.my

My Analysis 

Forecast P/E now	(2.24-0.015)/0.0811 = 27.44 (Moderate)
Target Price	2.27+0.015 = 2.29 (PE 28.0, EPS 0.0811, DPS 0.015)
Decision	BUY if stock price near to SMA20 and got stronger buying volume than selling
Comment	Revenue increased 21.9% and was second consecutive quarter increasing and also higher than preceding year corresponding quarter 5.7%, eps decreased 43.8% and was third consecutive quarter decreasing but still higher than preceding year corresponding quarter 185.2%, no cash generated from operating and cash generated from borrowings also not enough to cover all expenses hence spent 49.4% of Group cash, stronger liquidity ratio at moderate level now, higher gearing ratio at very high level now, higher property development cost can indicate still good prospect from property development division
First Support Price	2.1
Second Support Price	2.0
Risk Rating	MODERATE

Research House

OSK Target Price	3.13 (2011-08-02)
Kenanga Target Price	3.44 (2011-08-17)
UOB Target Price	2.57 (2011-10-03)
HwangDBS Target Price	3.25 (2011-11-01)
CIMB Target Price	1.9 (2011-11-24)
AMMB Target Price	2.13 (2011-12-07)
RHB Target Price	2.55 (2011-12-07)
HLG Target Price	2.22 (2012-01-10)
MIDF Target Price	2.4 (2012-02-02)

Accounting Ratio 

Return on Equity	6.88%
Dividend Yield	0.67%
Profit Margin	5.75%
Tax Rate	6.74%
Asset Turnover	0.2366
Net Asset Value Per Share	0.96
Net Tangible Asset per share	0.92
Price/Net Tangible Asset Per Share	2.05
Cash Per Share	0.5
Liquidity Current Ratio	2.4804
Liquidity Quick Ratio	2.002
Liquidity Cash Ratio	0.7993
Gearing Debt to Equity Ratio	2.703
Gearing Debt to Asset Ratio	0.7239
Working capital per thousand Ringgit sale	108.5%
Days to sell the inventory	139
Days to collect the receivables	317
Days to pay the payables	280

Technical Analysis 

SMA 20	2.107 (Uptrend 29 days)
SMA 50	2.04 (Uptrend)
SMA 100	1.965 (Uptrend)
SMA 200	2.091 (Same)
MACD	0.049493 (Uptrend 6 days)
MACD Histogram	0.013898 (Uptrend 75 days)

My notes based on 2011 quarter 3 report (number in '000):-
- Higher revenue was due to higher contribution from the Group’s revenue recognition of ongoing and encouraging strata office sales of property development projects at Kuala Lumpur Sentral however lower revenue was noted from the infrastructure and environmental segment due to completion of existing environmental projects, with continuation of new phases which was recently approved but with limited preliminary work done

- Estimate next 4Q eps after 2011 Q3 result announced = 0.0811, estimate PE on current price 2.24 = 27.44(DPS 0.015)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.0811, estimate highest/lowest PE = 28.91/18.06 (DPS 0.015)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0156*4*1.3 = 0.0811, estimate highest/lowest PE = 31.87/24.11 (DPS 0.015)
- Estimate next 4Q eps after 2010 Q4 result announced = 1067579*1.3*0.09/1380582 = 0.0905(profit margin per 9%, revenue yearly increase rate 30%), estimate highest/lowest PE = 26.02/21.49 (DPS 0.015)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0188*4*1.1 = 0.0827(profit margin 8%, revenue increase rate 20%), estimate highest/lowest PE = 29.02/22.61 (DPS 0.01)
- Estimate next 5Q eps after 2010 Q2 result announced = 0.0129,0.0175,0.0202,0.0237,0.0313(calculation is based on receivables, revenue, 8% profit margin and 27% tax rate), exclude 0.0129 then cum_eps is 0.0927, estimate highest/lowest PE = 24.49/17.26 (DPS 0.01)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0743, estimate highest/lowest PE = 23.96/18.03 (DPS 0.01)

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