KLCI Stock - HOMERIZ / 5160 - 2012 Quarter 3

Company Info 

Market Capital (Capital Size)	59,000,000 (Very Small)
Par Value	RM 0.20

My Analysis 

Forecast P/E now	(0.295-0.0255)/0.0578 = 4.66 (Moderate)
Target Price	0.32+0.0255 = 0.34 (PE 5.5, EPS 0.0578, DPS 0.0255)
Decision	BUY for dividend as long as still above SMA100
Comment	Revenue decreased 5.6% and was second consecutive quarter decreasing but still higher than preceding year corresponding quarter 15%, eps increased 4.2% and also higher than preceding year corresponding quarter 69.3%, cash generated from operating more than enough to cover all expenses, margin is maintain good, liquidity ratio indicate financial strength is very strong now, lower gearing ratio can indicate not able to generate more return with leverage but is free of lender issue, all accounting of collection or repayment perid is good
First Support Price	0.28
Second Support Price	0.26
Risk Rating	MODERATE

Accounting Ratio 

Return on Equity	20.71%
Dividend Yield	8.64%
Gross Profit Margin	-
Operating Profit Margin	16.62%
Net Profit Margin	16.45%
Tax Rate	5.13%
Asset Turnover	1.174
Net Asset Value Per Share	0.34
Net Tangible Asset per share	0.34
Price/Net Tangible Asset Per Share	0.91
Cash Per Share	0.1
Liquidity Current Ratio	6.1666
Liquidity Quick Ratio	3.5419
Liquidity Cash Ratio	2.4926
Gearing Debt to Equity Ratio	0.1922
Gearing Debt to Asset Ratio	0.1544
Working capital per thousand Ringgit sale	41.5%
Days to sell the inventory	91
Days to collect the receivables	30
Days to pay the payables	33

Technical Analysis 

SMA 10	0.29 (Same)
SMA 20	0.294 (Downtrend 20 days)
SMA 50	0.298 (Same)
SMA 100	0.281 (Same)
SMA 200	0.276 (Same)
MACD (26d/12d)	-0.002413 ( 0.000505 )
Signal (9)	-0.002425 ( 3e-006 )
MACD Histogram	0.000012 (Bullish trend 1 day)
Bolinger Upper Band	0.315
Bolinger Lower Band	0.273

My notes based on 2012 quarter 3 report (number in '000):-
- Higher revenue and pbt than FY11Q3 was attributed to better selling price of certain product and an increase in volume of product sold and higher profit margin

- Higher pbt than FY12Q2 mainly attributable to the one off expenses, bonus payout to employees expenses incurred in the preceding quarter Q2FY2012

- Estimate next 4Q eps after 2012 Q3 result announced = 72215*0.16/200000 = 0.0578, estimate PE on current price 0.295 = 4.66(DPS 0.0255)
- Estimate next 4Q eps after 2012 Q2 result announced = 68607*0.18/200000 = 0.0617, estimate highest/lowest PE = 5.23/3.69 (DPS 0.0225)
- Estimate next 4Q eps after 2012 Q1 result announced = 68514*0.15/200000 = 0.0514, estimate highest/lowest PE = 6.08/4.72 (DPS 0.0225)
- Estimate next 4Q eps after 2011 Q4 result announced = 0.0196*4 = 0.0784, estimate highest/lowest PE = 3.83/2.93 (DPS 0.02)
- Estimate next 4Q eps after 2011 Q3 result announced = 0.0088*4*1.05 = 0.037, estimate highest/lowest PE = 7.57/4.86 (DPS 0.02)
- Estimate next 4Q eps after 2011 Q2 result announced = (0.0172+0.0085)*2 = 0.0514, estimate highest/lowest PE = 7.2/4.67 (DPS 0.02)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.0172*4*1.05 = 0.0722(revenue incrreased, improved balance sheet), estimate highest/lowest PE = 6.09/4.57 (DPS 0.04)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0207*4 = 0.0828, estimate highest/lowest PE = 7/4.29 (DPS 0.04)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0242*4*0.95 = 0.092, estimate highest/lowest PE = 6.47/4.35 (DPS 0.04)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0268*4*0.95 = 0.1018, estimate highest/lowest PE = 6.04/4.91 (DPS 0.04)

- In FY2010, revenue recorded RM110 million and profit RM21.7 million
- In FY2009, revenue recorded RM108.4 million and profit RM22.7 million
- In FY2008, revenue recorded RM92.6 million and profit RM12.4 million
- In FY2007, revenue recorded RM73.8 million and profit RM10.5 million

- Revenue regions percentage: Europe-60%, Australasia-26%, North & South America-8%, Others-6%

- Revenue products percentage: Upholstered Sofas-55%, Upholstered Dining Chairs-30%, Upholstered Bed Frames-13%, Others-2%

- Dividend policy envisage not less than 40% of net profit, intends to recommend and distribute at least 50% of net profits

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