KLCI Stock - TONGHER / 5010 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	271,425,900 (Small)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(2.13-0.08)/0.2138 = 9.59 (Moderate)
Target Price	2.14+0.08 = 2.22 (PE 10.0, EPS 0.2138, DPS 0.08)
Decision	BUY if stock price near to SMA20 and Bolinger upper band open and got stronger buying volume than selling
Comment	Revenue decreased 10.4% but higher than preceding year corresponding quarter 54.2%, eps decreased 64.6% and was second consecutive quarter decreasing and also lower than preceding year corresponding quarter 51.4%, cash generate from operating and financing more than enough to cover investing expenses, weaker liquidity ratio but still at moderate level now, higher gearing ratio at moderate now, higher inventory which still indicate high revenue in near future, affected by strengthened of RM against USD
First Support Price	2.03
Second Support Price	1.93
Risk Rating	MODERATE

Research House

OSK Target Price	2.4 (2011-08-22)
Affin Target Price	2.85 (2011-09-07)

Accounting Ratio

Return on Equity	9.08%
Dividend Yield	3.76%
Profit Margin	5.26%
Tax Rate	22.17%
Asset Turnover	1.0102
Net Asset Value Per Share	2.47
Net Tangible Asset per share	2.47
Price/Net Tangible Asset Per Share	0.83
Cash Per Share	0.87
Liquidity Current Ratio	2.1661
Liquidity Quick Ratio	0.992
Liquidity Cash Ratio	0.6384
Gearing Debt to Equity Ratio	0.5746
Gearing Debt to Asset Ratio	0.3127
Working capital per thousand Ringgit sale	34.8%
Days to sell the inventory	142
Days to collect the receivables	37
Days to pay the payables	10

Technical Analysis

SMA 20	2.074 (Uptrend 19 days)
SMA 50	2.015 (Uptrend)
SMA 100	1.995 (Uptrend)
SMA 200	2.165 (Downtrend)
MACD	0.026069 (Uptrend 4 days)
MACD Histogram	0.014315 (Uptrend 19 days)

My notes based on 2011 Quarter 3 report (number in '000):-
- Higher revenue than FY10Q3 due to increasing demand, and consolidation of the newly acquired subsidiaries, Tong Heer Aluminium Indus, Tong Heer Aluminium Industries Sdn Bhd and its subsidiaries but lower pbt mainly contributed by the unrealized loss on foreign exchange, as a result of the strengthened RM against USD and partially offset higher sales demand

- Lower pbt than FY11Q2 due to lower sales and unrealized loss on foreign exchange

- Estimate next 4Q eps after 2011 Q3 result announced = (0.075+0.0319)*2 = 0.2138, estimate PE on current price 2.13 = 9.59(DPS 0.08)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.075*4 = 0.3(exclude RM1.8m other income), estimate highest/lowest PE = 7.07/5.93 (DPS 0.08)
- Estimate next 4Q eps after 2011 Q1 result announced = (0.1043+0.0543)*2 = 0.3172, estimate highest/lowest PE = 8.23/5.67 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0375*4 = 0.15(0.0375 is average eps of recent 2 quarter exclude non-repeatable profit RM 5.1 million), estimate highest/lowest PE = 18.93/12.33 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.154*1.1 = 0.1694(0.154 is recent 4Q cum_eps), estimate highest/lowest PE = 11.22/9.92 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0347(average of recent 3Q)*4 = 0.1388, estimate highest/lowest PE = 13.54/11.53 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0469*4 = 0.1876, estimate highest/lowest PE = 10.61/8.8 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0278*4 = 0.1112, estimate highest/lowest PE = 16.19/14.39 (DPS 0.05)

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