KLCI Stock - BAT / 4162 - 2011 Quarter 4

Company Info 

Market Capital (Capital Size)	14,853,270,600 (Very Large)
Par Value	RM 0.50

My Analysis 

Forecast P/E now	(52.02-2.76)/2.5705 = 19.16 (High)
Target Price	46.27+2.76 = 49.03 (PE 18.0, EPS 2.5705, DPS 2.76)
Decision	Not interested unless MACD start move back to bullish trend
Comment	Revenue decreased 10.6% but higher than preceding year corresponding quarter 2.9%, eps increased 2.5% but lower than preceding year corresponding quarter 1.1%, cash generated from operating enough to cover financing expenses but spent 14% of Group cash to cover investing expenses, weaker liquidity ratio at weak level now, slightly lower gearing ratio at very high level now, debt ratio at high level now, all accounting ratio are good, lower inventory can indicate decline in consumption
First Support Price	51.5
Second Support Price	48.0
Risk Rating	MODERATE

Research House

Kenanga Target Price	42.2 (2011-07-22)
TA Target Price	48.3 (2011-07-22)
RHB Target Price	42.4 (2011-10-19)
AMMB Target Price	45.9 (2011-10-21)
CIMB Target Price	44.9 (2011-10-21)
ECM Target Price	43.8 (2011-10-21)
HwangDBS Target Price	46.6 (2012-02-17)
Maybank Target Price	50.4 (2012-02-17)
MIDF Target Price	47.45 (2012-02-17)
OSK Target Price	52.47 (2012-02-17)

Accounting Ratio 

Return on Equity	166.68%
Dividend Yield	5.31%
Profit Margin	23.18%
Tax Rate	21.06%
Asset Turnover	2.6331
Net Asset Value Per Share	1.51
Net Tangible Asset per share	0.07
Price/Net Tangible Asset Per Share	747.14
Cash Per Share	1.07
Liquidity Current Ratio	0.8499
Liquidity Quick Ratio	0.6178
Liquidity Cash Ratio	0.3689
Gearing Debt to Equity Ratio	2.6306
Gearing Debt to Asset Ratio	0.7246
Working capital per thousand Ringgit sale	-3.0%
Days to sell the inventory	22
Days to collect the receivables	18
Days to pay the payables	42

Technical Analysis 

SMA 20	51.876 (Uptrend 23 days)
SMA 50	50.081 (Uptrend)
SMA 100	46.913 (Uptrend)
SMA 200	44.436 (Uptrend)
MACD (26d/12d)	0.682851 ( 0.055786 )
Signal (9)	0.769156 ( 0.021576 )
MACD Histogram	0.086305 (Bearish trend 2 days)

My notes based on 2011 quarter 4 report (number in '000):-
- Higher revenue than FY10Q4 due to Dunhill performed extremely well and sub-contract manufacturing cigarette volume increased but pbt was broadly flat due to impact of lower margins as a result of the ban on pack sizes below 20 in June 2010 and the effect of the operating factors. Pat declined due to the higher tax effective rate in 2011 (25%) as compared with 2010 (24%) which included a 2009 tax credit realised in 2010

- Lower pbt than FY11Q3 due to lower volumes as a result of trade speculation by retailers and distributors at the end of Quarter 3, 2011 anticipating an excise increase to be announced during the 2012 Government Budget exercise but pat improved due to deferred tax assets from temporary timing difference of the tax base of assets and its carrying value in the financial statements

- Estimate next 4Q eps after 2011 Q4 result announced = 431735*1.7/285530 = 2.5705, estimate PE on current price 52.02 = 19.51(DPS 2.76)
- Estimate next 4Q eps after 2011 Q3 result announced = (0.6173+0.6449)*2*1.05 = 2.6506, estimate highest/lowest PE = 18.77/15.45 (DPS 2.76)
- Estimate next 4Q eps after 2011 Q2 result announced = 1.2703*2 = 2.5406, estimate highest/lowest PE = 17.43/15.74 (DPS 2.7)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.6254*4 = 2.5016, estimate highest/lowest PE = 18.43/17.2 (DPS 2.4)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.5977*4*0.95 = 2.2713, estimate highest/lowest PE = 20.36/18.67 (DPS 2.41)
- Estimate next 4Q eps after 2010 Q2 result announced = 2.4323(7% drop from 2.6154), estimate highest/lowest PE = 19.56/16.8 (DPS 2.36)
- Estimate next 4Q eps after 2010 Q1 result announced = 2.4323(7% drop from 2.6154), estimate highest/lowest PE = 17.53/16.31 (DPS 2.36)
- Estimate next 4Q eps after 2009 Q4 result announced = 2.4323, estimate highest/lowest PE = 17.82/16.06 (DPS 2.36)
- Estimate next 4Q eps after 2009 Q3 result announced = 2.4323, estimate highest/lowest PE = 17.99/16.1 (DPS 2.35)
- Estimate next 4Q eps after 2009 Q2 result announced = 2.8448, estimate highest/lowest PE = 16.36/14.54 (DPS 2.65)

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