KLCI Stock - TOPGLOV / 7113 - 2012 Quarter 2

TOP GLOVE CORPORATION BERHAD

My notes based on 2012 Quarter 2 report (number in '000):-
- The increase in sales revenue was attributed to an increase in demand for gloves. The significant improvement in PBT was primarily attributed to a more favourable operating environment which saw the easing of key raw material latex prices. Average latex prices declined by 7% (from RM8.14/kg in 1HFY2011 to RM7.58/kg in 1HFY2012) whilst average nitrile prices increased by 34% (from RM4.33/kg in 1HFY2011 to RM5.81/kg in 1HFY2012)

- Compared with the PBT of preceding quarter ended 30 November 2011 (1QFY2012) of RM41.6 million, the Group’s 2QFY2012 PBT of RM68.8 million registered a 65.4% increase. The significant improvement is primarily attributed to an increase in sales volume coupled with a decline in latex prices by 18% (from RM8.34/kg in 1QFY2012 to
RM6.81/kg in 2QFY2012). The average US Dollar in 2QFY2012 also strengthened against the Ringgit by 2% (from RM3.07/USD in 1QFY2012 to RM3.13/USD in 2QFY2012), resulting in a net gain in foreign exchange amounting to RM11.4 million in 2QFY2012 as opposed to a net loss of RM13.3 million in the preceding quarter

- Estimate next 4Q eps after 2012 Q2 result announced = 1195557*0.15/619231 = 0.2896, estimate PE on current price 4.96 = 16.68(DPS 0.13)
- Estimate next 4Q eps after 2012 Q1 result announced = (0.0508*1.2)+(0.0508*1.1*3) = 0.2286, estimate highest/lowest PE = 22.79/18.59 (DPS 0.11)
- Estimate next 4Q eps after 2011 Q4 result announced = (0.0417*1.4)+(0.0417*1.4*1.1*3) = 0.251, estimate highest/lowest PE = 18.49/15.5 (DPS 0.11)
- Estimate next 4Q eps after 2011 Q3 result announced = 0.047*4*1.2 = 0.2256, estimate highest/lowest PE = 25.62/16.62 (DPS 0.1)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.08+0.088+0.0968+0.1065 = 0.3713, estimate highest/lowest PE = 15.19/13.74 (DPS 0.23)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.2122*4 = 0.8488*1.1 = 0.9337(10% adjustment), estimate highest/lowest PE = 15.5/10.36 (DPS 0.29)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.235*4 = 0.94, estimate highest/lowest PE = 14.68/11.66 (DPS 0.22)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.217*4 = 0.868, estimate highest/lowest PE = 14.31/10.75 (DPS 0.22)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.191*4 = 0.764, estimate highest/lowest PE = 12.23/10.2 (DPS 0.22)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.1424*4 = 0.5696, estimate highest/lowest PE = 14.04/10.8 (DPS 0.15)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.1221*4 = 0.4884, estimate highest/lowest PE = 13.21/9.89 (DPS 0.15)

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