KLCI Stock - F&N / 3689 - 2012 Quarter 3

Company Info 

Market Capital (Capital Size)	7,070,721,469 (Very Large)
Par Value	RM 1.00

My Analysis 

Forecast P/E now	(19.5-0.47)/0.5234 = 36.36 (High)
Target Price	10.99+0.47 = 11.46 (PE 21.0, EPS 0.5234, DPS 0.47)
Decision	Not interested unless pbt increase more which can enough to cover good dividend rate or base on technical analysis which stock price continue strong sustain above SMA50
Comment	Revenue increased 22.8% and also higher than preceding year corresponding period 1.6%, eps decreased 51.8% and also lower than preceding year corresponding quarter 33.9%, cash generated from operating not enough to cover financing expenses hence increased borrowings and spent 33.2% of Group cash to cover other expenses, margin decreasing to low level, liquidity ratio indicate financial strength is weakeaning but still acceptable level, higher gearing ratio indicate more leverage to generate more income in the future by more investment and the current ratio still not worry by lender, all accounting of turnover period is good, higher inventory can indicate Group products demand still strong
First Support Price	19.2
Second Support Price	17.8
Risk Rating	HIGH

Research House

MIDF Target Price	14 (2012-02-08)
AMMB Target Price	18.1 (2012-08-08)
CIMB Target Price	13.4 (2012-08-08)
Maybank Target Price	20.79 (2012-08-08)
TA Target Price	18.22 (2012-08-08)

Accounting Ratio 

Return on Equity	16.54%
Dividend Yield	2.41%
Gross Profit Margin	-
Operating Profit Margin	6.23%
Net Profit Margin	6.08%
Tax Rate	5.26%
Asset Turnover	1.2787
Net Asset Value Per Share	4.03
Net Tangible Asset per share	3.66
Price/Net Tangible Asset Per Share	5.56
Cash Per Share	0.53
Liquidity Current Ratio	1.3253
Liquidity Quick Ratio	0.8356
Liquidity Cash Ratio	0.1995
Gearing Debt to Equity Ratio	0.8001
Gearing Debt to Asset Ratio	0.4444
Working capital per thousand Ringgit sale	9.4%
Days to sell the inventory	55
Days to collect the receivables	61
Days to pay the payables	86

Technical Analysis 

SMA 10	19.56 (Downtrend)
SMA 20	19.843 (Downtrend 8 days)
SMA 50	19.283 (Uptrend)
SMA 100	18.735 (Uptrend)
SMA 200	18.199 (Uptrend)
MACD (26d/12d)	-0.025559 ( 0.006648 )
Signal (9)	0.086048 ( 0.027902 )
MACD Histogram	0.111607 (Bearish trend 20 days)
Bolinger Upper Band	20.719
Bolinger Lower Band	18.967

My notes based on 2012 quarter 3 report (number in '000):-
- Higher revenue mainly due to Dairies Thailand well executed marketing activities in conjunction with the resumption of production in Rojana pent-up demand from the consumer and trade

- Lower pbt mainly attributable to the absense of Coca-Cola contribution, a restructuring charge of RM8.3 million incurred by the soft drinks division as part of its on-going rationalisation exercise to improve productivity, accelerated depreciation on PJ factory building and higher marketing expenses in Thailand offset by reversal of provision for compensation of RM5 million

- Estimate next 4Q eps after 2012 Q3 result announced = 1462367*0.13/363226 = 0.5234, estimate PE on current price 19.5 = 36.36(DPS 0.47)
- Estimate next 4Q eps after 2012 Q2 result announced = 1478221*0.12/362737 = 0.489, estimate highest/lowest PE = 43.07/33.46 (DPS 0.44)
- Estimate next 4Q eps after 2012 Q1 result announced = 1597694*0.11/362592 = 0.4847, estimate highest/lowest PE = 38.72/33.36 (DPS 0.43)
- Estimate next 4Q eps after 2011 Q4 result announced = 0.2151*4*0.95 = 0.8174, estimate highest/lowest PE = 22.18/19.78 (DPS 0.97)
- Estimate next 4Q eps after 2011 Q3 result announced = (0.3+0.2151)*2*0.7 = 0.7211, estimate highest/lowest PE = 25.64/21.43 (DPS 0.41)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.3*4 = 1.2(exclude RM53 million from sale of property income), estimate highest/lowest PE = 16.02/14.52 (DPS 0.58)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.2*4 = 0.8(around 5% ROE), estimate highest/lowest PE = 22.09/18.07 (DPS 0.545)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.875*0.95 = 0.8313, estimate highest/lowest PE = 17.58/15.82 (DPS 1.645)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.8236(correction), estimate highest/lowest PE = 17.53/15.85 (DPS 0.465)
- Estimate next 4Q eps after 2010 Q2 result announced = 1.0072(10% grow from 0.4578*2), estimate highest/lowest PE = 14.43/10.18 (DPS 0.465)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.961(10% grow from 0.2184*4), estimate highest/lowest PE = 11.06/10.44 (DPS 0.47)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.8195, estimate highest/lowest PE = 13.58/12.04 (DPS 0.47)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.8, estimate highest/lowest PE = 12.79/11.29 (DPS 0.47)

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