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19 February 2013
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OUTPERFORM
Price: Target Price:
Share Price Performance
RM3.24 RM3.64
3.60
3.40
Comments
3.20
3.00
2.80 Feb-12
Apr-12
Jun-12
Aug-12
Oct-12
Dec-12
Feb-13
KLCI YTD KLCI chg YTD stock price chg Stock Information Bloomberg Ticker Market Cap (RM m) Issued shares 52-week range (H) 52-week range (L) 3-mth avg daily vol: Free Float Beta Major Shareholders KOSSAN HOLDINGS S/B KWSP EPF Summary Earnings Table FYE Dec (RMm) 2012E Turnover 1192.2 EBIT 139.7 PBT 132.8 Net Profit (NP) 105.8 Core NP 105.8 Consensus (NP) Earnings Revision EPS (sen) 33.1 EPS growth (%) 15.8 DPS (sen) 7.0 NTA/Share (RM) 1.8 PER 9.8 Price/NTA (x) 1.8 Net Gearing (x) 0.1 Dividend Yield (%) 2.2
Outlook
2013E 1297.0 151.7 146.1 116.4 116.4 117.8 N.A. 36.4 10.0 7.0 2.2 8.9 1.5 0.0 2.2
2014E 1475.2 175.2 171.5 136.6 136.6 134.3 N.A. 42.7 17.4 7.0 2.6 7.6 1.3 -0.1 2.2
Risks
PP7004/02/2013(031762)
KENANGA RESEARCH
19 February 2013
2011A 1090.0 159.8 -40.3 119.5 1.6 -7.5 0.0 0.0 113.6 -21.8 -0.4 91.4 91.4
2012A 1192.2 187.2 -47.5 139.7 1.3 -8.2 0.0 0.0 132.8 -26.6 -0.4 105.8 105.8
2013E 1295.5 203.4 -51.9 151.5 2.0 -7.6 0.0 0.0 145.8 -29.2 -0.5 116.2 116.2
2014E 1475.0 231.6 -56.4 175.2 3.4 -7.1 0.0 0.0 171.4 -34.3 -0.5 136.6 136.6
Profitability (%) EBITDA Margin Operating Margin PBT Margin Core Net Margin Effective Tax Rate ROA ROE DuPont Analysis Net Margin (%) Assets Turnover (x) Leverage Factor (x) ROE (%) Leverage Debt/Asset (x) Debt/Equity (x) Net Cash/(Debt)
2010A 409.5 0.9 0.3 123.7 150.5 1.0 91.5 777.3 113.1 150.1 9.5 27.7 32.3 2.0 442.6 159.9 282.7 442.6
2011A 433.0 4.9 0.1 163.8 157.6 1.4 51.6 812.4 103.5 134.0 8.5 26.0 34.2 9.5 496.8 159.9 337.0 496.8
2012A 481.8 4.9 0.1 179.1 172.4 1.2 91.2 930.7 113.2 140.0 9.3 26.0 41.3 9.9 591.0 159.9 431.2 591.0
2013E 479.8 4.9 0.1 194.7 187.3 1.3 139.0 1007.2 123.0 110.0 10.1 26.0 32.1 10.4 695.6 159.9 535.7 695.6
2014E 473.4 4.9 0.1 221.6 213.3 1.5 237.7 1152.6 140.0 120.0 11.5 26.0 23.5 10.9 820.6 159.9 660.8 820.6
Valuations EPS (sen) NDPS (sen) BVPS (RM) PER (x) Net Div. Yield (%) P/BV (x) 35.5 10.0 1.4 9.1 3.1 2.3 28.6 7.0 1.6 11.3 2.2 2.1 33.1 7.0 1.8 9.8 2.2 1.8 36.3 7.0 2.2 8.9 2.2 1.5 42.7 7.0 2.6 7.6 2.2 1.3
Cashflow Statement FY Aug (RM m) 2010A Operating CF 137.8 Investing CF (39.4) Financing CF (35.2) Change In Cash 63.2 Free CF 52.7
4.5
4.5
4
4
3.5
3.5
3
3
2.5
2.5
1.5
1.5
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KENANGA RESEARCH
Stock Ratings are defined as follows: Stock Recommendations OUTPERFORM : A particular stocks Expected Total Return is MORE than 10% (An approximation to the 5-year annualised Total Return of FBMKLCI of 10.2%) MARKET PERFORM : A particular stocks Expected Total Return is WITHIN the range of 3% to 10% UNDERPERFORM : A particular stocks Expected Total Return is LESS than 3% (An approximation to the 12-month Fixed Deposit Rate of 3.15% as a proxy to Risk-Free Rate)
Sector Recommendations*** OVERWEIGHT NEUTRAL UNDERWEIGHT : A particular stocks Expected Total Return is MORE than 10% (An approximation to the 5-year annualised Total Return of FBMKLCI of 10.2%) : A particular stocks Expected Total Return is WITHIN the range of 3% to 10% : A particular stocks Expected Total Return is LESS than 3% (An approximation to the 12-month Fixed Deposit Rate of 3.15% as a proxy to Risk-Free Rate)
***Sector recommendations are defined based on market capitalisation weighted average expected total return for stocks under our coverage.
This document has been prepared for general circulation based on information obtained from sources believed to be reliable but we do not make any representations as to its accuracy or completeness. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may read this document. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees. Kenanga Investment Bank Berhad accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or any solicitations of an offer to buy or sell any securities. Kenanga Investment Bank Berhad and its associates, their directors, and/or employees may have positions in, and may effect transactions in securities mentioned herein from time to time in the open market or otherwise, and may receive brokerage fees or act as principal or agent in dealings with respect to these companies. Published and printed by: KENANGA INVESTMENT BANK BERHAD (15678-H) 8th Floor, Kenanga International, Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia Telephone: (603) 2166 6822 Facsimile: (603) 2166 6823 Website: www.kenangaresearch.com Chan Ken Yew Head of Research
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KENANGA RESEARCH