Left Brain Right B - the DBS Vickers Securities Equities Research

Regional Equity Strategy 4Q 2009
MISC
Income Statement (RM m) Balance Sheet (RM m)
FY Mar 2009A 2010F 2011F 2012F FY Mar 2009A 2010F 2011F 2012F
Turnover 15,783 13,543 15,034 16,025 Net Fixed Assets 27,385 27,994 28,841 28,421
Cost of Goods Sold (12,986) (10,699) (11,693) (12,435) Invts in Associates & JVs 315 409 499 562
Gross Profit 2,797 2,844 3,342 3,590 Other LT Assets 1,673 1,698 1,853 1,988
Other Opng (Exp)/Inc (836) (774) (933) (1,027) Cash & ST Invts 3,725 1,847 1,175 1,927
Operating Profit 1,961 2,070 2,409 2,563 Inventory 442 327 363 387
Other Non Opg (Exp)/Inc 0 0 0 0 Debtors 3,217 2,202 2,445 2,606
Associates & JV Inc 37 94 90 63 Other Current Assets 0 0 0 0
Net Interest (Exp)/Inc (403) (450) (433) (413) Total Assets 36,757 34,479 35,177 35,891
Exceptional Gain/(Loss) 0 0 0 0
Pre-tax Profit 1,595 1,713 2,066 2,213 ST Debt 3,104 3,104 3,104 3,104
Tax (68) (112) (115) (110) Other Current Liab 3,482 2,987 3,316 3,535
Minority Interest (123) (170) (161) (147) LT Debt 8,748 6,641 6,228 5,802
Preference Dividend 0 0 0 0 Other LT Liabilities 129 153 286 406
Net Profit 1,405 1,432 1,789 1,956 Shareholder’s Equity 20,953 21,083 21,570 22,224
Net Profit before Except. 1,405 1,432 1,789 1,956 Minority Interests 341 511 672 819
EBITDA 3,668 3,848 4,323 4,558 Total Cap. & Liab. 36,757 34,479 35,177 35,891
Sales Gth (%) 21.9 (14.2) 11.0 6.6 Non-Cash Wkg. Capital 177 (458) (509) (542)
EBITDA Gth (%) (11.6) 4.9 12.3 5.4 Net Cash/(Debt) (8,127) (7,897) (8,157) (6,980)
Opg Profit Gth (%) (26.9) 5.5 16.4 6.4
Net Profit Gth (%) (42.0) 1.9 25.0 9.3
Effective Tax Rate (%) 4.2 6.5 5.6 4.9
Cash Flow Statement (RM m)
Rates & Ratio
FY Mar 2009A 2010F 2011F 2012F FY Mar 2009A 2010F 2011F 2012F
Pre-Tax Profit 1,595 1,713 2,066 2,213 Gross Margins (%) 17.7 21.0 22.2 22.4
Dep. & Amort. 1,707 1,779 1,914 1,995 Opg Profit Margin (%) 12.4 15.3 16.0 16.0
Tax Paid (68) (112) (115) (110) Net Profit Margin (%) 8.9 10.6 11.9 12.2
Assoc. & JV Inc/(loss) (37) (94) (90) (63) ROAE (%) 7.1 6.8 8.4 8.9
Chg in Wkg.Cap. (157) 635 50 34 ROA (%) 4.3 4.0 5.1 5.5
Other Operating CF 368 368 368 368 ROCE (%) 6.3 6.0 7.2 7.6
Net Operating CF 3,409 4,289 4,193 4,437 Div Payout Ratio (%) 92.7 90.9 72.8 66.6
Capital Exp.(net) (3,982) (2,358) (2,730) (1,543) Net Interest Cover (x) 4.9 4.6 5.6 6.2
Other Invts.(net) 23 23 23 23 Asset Turnover (x) 0.5 0.4 0.4 0.5
Invts in Assoc. & JV (22) 0 0 0 Debtors Turn (avg days) 64.6 73.0 56.4 57.5
Div from Assoc & JV 3 3 3 3 Creditors Turn (avg days) 100.8 132.4 117.6 119.8
Other Investing CF 48 75 37 23 Inventory Turn (avg days) 13.6 15.7 12.9 13.1
Net Investing CF (3,930) (2,258) (2,667) (1,494) Current Ratio (x) 1.1 0.7 0.6 0.7
Div Paid (1,367) (1,352) (1,352) (1,352) Quick Ratio (x) 1.1 0.7 0.6 0.7
Chg in Gross Debt 3,264 (2,107) (413) (425) Net Debt/Equity (X) 0.4 0.4 0.4 0.3
Capital Issues 0 0 0 0 Net Debt/Equity ex MI (X) 0.4 0.4 0.4 0.3
Other Financing CF 384 (450) (433) (413) Capex to Debt (%) 33.6 24.2 29.3 17.3
Net Financing CF 2,282 (3,909) (2,198) (2,191) Z-Score (X) 2.6 2.5 2.6 2.7
Net Cashflow 1,761 (1,878) (673) 752 N. Cash/(Debt)PS (sen) (218.5) (212.3) (219.3) (187.6)
Opg CFPS (sen) 95.9 98.2 111.4 118.4
Free CFPS (sen) (15.4) 51.9 39.3 77.8
Quarterly / Interim Income Statement (RM m)
Segmental Breakdown / Assumptions
FY Mar 2Q2009 3Q2009 4Q2009 1Q2010 FY Mar 2009A 2010F 2011F 2012F
Turnover 4,456 3,679 3,999 3,893 Revenues (RM m)
Cost of Goods Sold (3,983) (3,318) (3,807) (3,633) Shipping 8,024 7,668 8,495 8,627
Gross Profit 473 362 192 260 Integrated Liner Logistics 4,550 2,023 2,487 3,371
Other Oper. (Exp)/Inc 124 49 101 95 FPSO/FSO 692 807 807 782
Operating Profit 597 411 293 355 Heavy Engineering 2,518 3,045 3,245 3,245
Other Non Opg (Exp)/Inc 0 0 0 0 Others 0 0 0 0
Associates & JV Inc 1 6 31 16 Total 15,784 13,543 15,034 16,025
Net Interest (Exp)/Inc (100) (104) (99) (88) Pre-tax profit (RM m)
Exceptional Gain/(Loss) 0 0 0 (8) Shipping 2,038 1,829 1,855 1,904
Pre-tax Profit 498 312 225 273 Integrated Liner Logistics (877) (724) (422) (285)
Tax (14) (32) (12) (2) FPSO/FSO 251 382 380 341
Minority Interest (34) (30) (32) (38) Heavy Engineering 349 365 389 389
Net Profit 450 250 182 233 Others (166) (139) (136) (136)
Net profit bef Except. 450 250 182 242 Total 1,595 1,713 2,066 2,213
Pre-tax profit Margins (%)
Sales Gth (%) 22.1 (17.4) 8.7 (2.6) Shipping 25.4 23.9 21.8 22.1
Opg Profit Gth (%) (9.5) (31.1) (28.6) 20.9 Integrated Liner Logistics (19.3) (35.8) (17.0) (8.4)
Net Profit Gth (%) (13.9) (44.6) (27.1) 28.4 FPSO/FSO 36.3 47.4 47.1 43.6
Gross Margins (%) 10.6 9.8 4.8 6.7 Heavy Engineering 13.9 12.0 12.0 12.0
Opg Profit Margins (%) 13.4 11.2 7.3 9.1 Others N/A N/A N/A N/A
Net Profit Margins (%) 10.1 6.8 4.5 6.0 Total 10.1 12.7 13.7 13.8
Key Assumptions
New LNG ships 3.0 0.0 0.0 1.0
Change in tanker rate (%) 34.3 (54.4) 25.4 4.6
Change in container rate (33.3) (42.0) 0.0 5.0
MYR/USD 3.4 3.6 3.4 3.3
Source: Company, DBS Vickers
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