Guan Chong Berhad

Date announced 16/11/2010
Quarter 30/09/2010 Qtr 3 FYE 31/12/2010

STOCK Guanchg C0DE 5102

Price $ 1.78 Curr. ttm-PE 6.71 Curr. DY 1.83%
LFY Div 3.25 DPO ratio 54%
ROE 43.8% PBT Margin 9.1% PAT Margin 6.0%

Rec. qRev 296563 q-q % chg 10% y-y% chq 83%
Rec qPbt 27002 q-q % chg 7% y-y% chq 264%
Rec. qEps 7.44 q-q % chg -8% y-y% chq 246%
ttm-Eps 26.54 q-q % chg 25% y-y% chq 699%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 6.00 Avg. L PE 5.00
Forecast High Pr 2.03 Forecast Low Pr 0.45 Recent Severe Low Pr 0.45
Current price is at Upper 1/3 of valuation zone.

RISK: Upside 16% Downside 84%
One Year Appreciation Potential 3% Avg. yield 10%
Avg. Total Annual Potential Return (over next 5 years) 13%

CPE/SPE 1.22 P/NTA 2.94 NTA 0.61 SPE 5.50 Rational Pr 1.46



Decision:
Already Owned: Buy, Hold, Sell, Filed; Review (future acq): Filed; Discard: Filed.
Guide: Valuation zones - Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell.

Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr