KPJ revenue recorded another year high

FY31/12/10
Financial Result
Quarter-to quarter comparison, company revenue up 12.5% to RM433.43m from RM385.34m 4Q09. However, net profit had drop RM6.5m to RM30.81m. 4Q09 net profit was RM37.36m. I cannot find any explanation from the report, i guess is something to do with some sort of adjustment on minority interest.

Year-to-year comparison sees revenue recorded another high of RM1656.2m. Revenue on last preceding year was RM1456.35m. PBT also increase 16% to RM168.13m vs RM144.92m for FY09. As say in the report, the increase in PBT is in line with the revenue and contribution from the hospitals.

Technical Outlook
KPJ share price was on uptrend from July 09, until Dec 10. A period of 14 months. Since then, it hovering around RM3.80, ups and down between MA(50d), but well above MA(100d).

From my point of view, warrant issue during Jan 10 much or less effect the share price, as profit will be diluted when they are exercise.

Stock Valuation
Base on annual EPS RM0.212, KPJ is trading at PE18x. I think it about right for the price we pay for this share(RM3.82 as at 15/3/11).

Future Prospect
From financial report, board of directors are optimistic about KPJ's performance in FY11, in tandem with increasing hospital capacity and activities.

Acquire 100% in Sibu Medical Centre Corporation for RM26.9m, and 100% in Sibu Geriatric Health & Nursing Centre Corporation for RM1.24m. The acquisition is expected to be complete by 1H11.

Into condition Subscription Deed for acquisition of up to 51% equity interest in Jeta Garden Waterfront Trust(JGWT) and up to 3,308,415 10-year convertible notes for total cash consideration up to  RM19m. JGWT is primarily involved in operating a retirement village in Queensland, Australia. Go here or here

Overall
KPJ is a fundamentally strong company. Company's revenue has been growing for the past 6 years(i only have data for this long). Inline with revenue growth, Shareholder's Equity has nearly double (0.86 times) since FY05. ROE averaging 13%(6 yrs) also prove that company always manage to generate profit for the shareholders.
In short term, share price may be drifting side way as more warrants to be exercise, diluted EPS. Both acquisition to be completed during FY11 shall generate more income to the company, push up the bottom line.
Long term prospect remain good.