A Brief Look at Guan Chong

Guan Chong Berhad Company

Business Description:
Guan Chong Berhad is a Malaysia-based company engaged in investment holding and provision of management services. Through its subsidiaries, the Company is engaged in the manufacturing and trading of cocoa-derived food ingredients and cocoa related products, which is predominantly carried out in Malaysia. As of December 31, 2009, the Company's direct subsidiaries were Guan Chong Cocoa Manufacturer Sdn. Bhd., Guan Chong Trading Sdn. Bhd., Enrich Mix Sdn. Bhd., GCB Foods Sdn. Bhd., GCB Marketing Sdn. Bhd., GCB Specialty Chocolates Sdn. Bhd., GCB America, Inc. and GCB Oversea Holdings Corporations.

Current Price (7/1/2011): 2.49
2009 Sales 642,649,516
Employees: 180
Market Cap: 597,600,000
Shares Outstanding: 240,000,000
Closely Held Shares: 167,840,000

Recent Financial Results

Announcement Date		Financial Yr. End		Qtr	Period End		Revenue RM '000		Profit/Lost RM'000		EPS		Amended
18-Nov-10		31-Dec-10		3	30-Sep-10		296,563		17,788		7.44		-
16-Nov-10		31-Dec-10		3	30-Sep-10		296,563		17,788		7.44		-
09-Aug-10		31-Dec-10		2	30-Jun-10		270,781		19,502		8.13		-
27-May-10		31-Dec-10		1	31-Mar-10		268,952		19,836		8.22		-

Estimated EPS for 2011 = 4*7.44 = 29.76 sen
At price of 2.49, it is trading at forward 2011 PE = 2.49 / 0.2976 = 8.4 x
Dividend to date 4.63 sen
At price of 2.49, the DY to date = 0.0463/2.49 = 1.86%

Year      DPS      EPS
2005      3.3        7.1
2006      4.0        7.3
2007      3.3        5.9
2008      1.0        2.9
2009      2.8        5.9
9M10    4.63    23.80     NTA   0.6060

Historical 
5 Yr
PE range 8.2 - 15.1
DY range 6.0% - 3.4%

10 Yr
PE range 8.2 - 14.2
DY range 6% - 3.6%

Capital changes

2004    1 to 4 Share Split, 7.4/10 Rights @ RM 0.25

2010   Proposed 1/3 Bonus and 1/4 free warrants

Commentary of prospects
The Board of Directors is optimistic about the performance of GCB in the current financial year since the global economy is showing signs of improvement. We believe GCB is well-positioned for growth as many initiatives to improve our competitiveness and profitability have been systematically carried out by the management team.

Barring any unforeseen circumstances, the Board of Directors of GCB expects that the Group’s financial performance for the financial year 2010 to be satisfactory.