Top Down Strategy and Large Cap Stock Picks - the DBS Vickers ...

Stock Profile: Resorts World
Regional Equity Strategy Q4 2007
Income Statement (RM m) Balance Sheet (RM m)
FY Dec 2006A 2007F 2008F 2009F FY Dec 2006A 2007F 2008F 2009F
Turnover 3,808.5 4,285.3 4,430.2 4,856.6 Net Fixed Assets 3,801.8 3,960.9 4,110.4 4,250.9
Cost of Goods Sold (2,302.2) (2,558.0) (2,649.9) (2,826.2) Invts in Assocs & JVs 2,070.6 1,126.9 1,126.9 1,126.9
Gross Profit 1,506.3 1,727.3 1,780.3 2,030.4 Other LT Assets 264.6 264.6 264.6 264.6
Other Opg (Exp)/Inc (171.0) (255.2) (188.0) (257.9) Cash & ST Invts 1,980.7 3,859.3 4,641.5 5,505.2
EBIT 1,335.3 1,472.0 1,592.3 1,772.6 Other Current Assets 254.7 308.7 318.6 347.8
Other Non Opg (Exp)/Inc 0.0 0.0 0.0 Total Assets 8,372.3 9,520.4 10,462.1 11,495.5
Associates & JV Inc (210.8) (62.9) 0.0 0.0
Net Interest (Exp)/Inc 14.2 8.7 96.2 51.8 ST Debt 87.8 100.0 100.0 100.0
Exceptional Gain/(Loss) 0.0 63.2 0.0 0.0 Other Current Liab 620.5 728.4 748.2 806.6
Pre-tax Profit 1,138.7 1,481.0 1,688.6 1,824.3 LT Debt 1,126.9 300.0 300.0 300.0
Tax (193.2) (382.8) (439.0) (456.1) Other LT Liabilities 279.5 279.5 279.5 279.5
Minority Interest 0.4 0.4 0.4 0.4 Shareholder’s Equity 6,249.5 8,104.7 9,027.0 10,002.4
Preference Dividend 0.0 0.0 0.0 0.0 Minority Interests 8.1 7.7 7.4 7.0
Net Profit 945.9 1,098.6 1,249.9 1,368.6 Total Cap. & Liab. 8,372.3 9,520.4 10,462.1 11,495.5
Net profit before Except. 945.9 1,035.4 1,249.9 1,368.6
EBITDA 1,358.0 1,713.3 1,842.8 2,032.0 Non-Cash Wkg. Cap (365.8) (419.6) (429.6) (458.8)
Sales Gth (%) 5 13 3 10 Net Cash/(Debt) 766.0 3,459.3 4,241.5 5,105.2
EBITDA Gth (%) (13) 26 8 10
EBIT Gth (%) 2 10 8 11
Effective Tax Rate (%) 17.0 25.8 26.0 25.0
Cash Flow Statement (RMm)
Rates & Ratios
FY Dec 2006A 2007F 2008F 2009F FY Dec 2006A 2007F 2008F 2009F
Pre-Tax Profit 1,138.7 1,417.8 1,688.6 1,824.3 Gross Margin (%) 39.6 40.3 40.2 41.8
Dep. & Amort. 233.6 240.9 250.5 259.5 EBITDA Margin (%) 35.7 40.0 41.6 41.8
Tax Paid (248.1) (382.8) (439.0) (456.1) EBIT Margin (%) 35.1 34.4 35.9 36.5
Assoc. & JV Inc/(loss) 210.8 62.9 0.0 0.0 Net Profit Margin (%) 24.8 25.6 28.2 28.2
Chg in Wkg.Cap. (11.6) 53.9 9.9 29.2 ROAE (%) 16.0 15.3 14.6 14.4
Other Operating CF 1.6 (45.1) (120.2) (75.8) ROA (%) 12.3 12.3 12.5 12.5
Net Operating CF 1,324.9 1,347.6 1,389.7 1,581.1 ROCE (%) 18.7 15.2 13.7 14.0
Capital Exp.(net) (319.3) (400.0) (400.0) (400.0) Div Payout Ratio (%) 22.7 25.5 26.2 28.7
Other Invts.(net) (263.8) 880.8 0.0 0.0 Interest Cover (x) NM NM NM NM
Invts in Assoc. & JV 0.0 0.0 0.0 0.0 Debtors Turn (avg days) 15.0 17.9 19.7 19.1
Div from Assoc & JV 0.0 0.0 0.0 0.0 Creditors Turn (avg days) 77.8 75.6 84.2 82.2
Other Investing CF 32.3 45.1 120.2 75.8 Inventory Turn (avg days) 8.5 8.0 8.2 8.2
Net Investing CF (550.8) 525.9 (279.8) (324.2) Current Ratio (x) 3.2 5.0 5.8 6.5
Div Paid (204.7) (280.2) (327.7) (393.2) Quick Ratio (x) 3.1 5.0 5.8 6.4
Chg in Gross Debt 687.8 (814.7) 0.0 0.0 Net Debt/Equity (X) CASH CASH CASH CASH
Capital Issues 27.8 1,100.0 0.0 0.0 Capex to Debt (%) 26.3 100.0 100.0 100.0
Other Financing CF (19.2) 0.0 0.0 0.0 N.Cash/(Debt)PS (sen) 14.0 58.6 71.8 86.5
Net Financing CF 491.7 5.1 (327.7) (393.2) Opg CFPS (sen) 24.4 21.9 23.4 26.3
Net Cashflow 1,265.9 1,878.6 782.3 863.7 Free CFPS (sen) 18.4 16.0 16.8 20.0
Valuation Graph : PE
30
25
Price & Price Relative to Index
(RM)
5.00
4.00
Relative Index
150
130
20
3.00
110
15
2.00
90
10
1.00
70
5
2002 2003 2004 2005 2006 2007
Source: Company, DBS Vickers
0.00
2005 2006 2007
Resorts (LHS) Relative KLCI Index (RHS)
50
91