Thursday, June 27, 2013

Apollo- top-line & bottom-line slid


Result Update

For QE30/4/2013, Apollo's net profit dropped 23% q-o-q or 18% y-o-y to RM7 million while revenue was lower by 4% q-o-q or 3% y-o-y to RM55 million. Top-line & bottom-line dropped due to lower demand from both local and export markets as compared to the festive months in QE31/1/2013. The lower revenue and higher operating cost had resulted in a decrease in the current quarter’s profit.


Table 1: Apollo's last 8 quarterly results


Chart 2: Apollo's last 23 quarterly results

Valuation

Apollo (closed at RM4.05 yesterday) is now trading at a PE of 10 times (based on last 4 quarters' EPS of 40 sen). For a consumer stock, Apollo's valuation is deemed undemanding.

Technical Outlook

Apollo is in a gradual uptrend which accelerated over the past 6 months. This sudden acceleration may taper off and the stock may move in a sideway manner for a while. It shoudl however find good support at the psychological RM4.00 level.


Chart 2: Apollo's weekly chart as at June 27, 2013_10.00am (Source: Quickcharts) 

Conclusion

Despite poorer financial performance, Apollo is still an attractive stock with positive technical outlook. As such,, Apollo remained a good stock for a long-term investment.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Apollo.

5 comments:

Anonymous said...

Hi Alex

Do you have investment idea on KPS and MKland?

KPS is in the midst to dispose its 56% stake in KHSB to KDEB for 76sen, with possible upward revise to 84sen pending due diligence study. Although the proceed just amount to RM 193m, but according to KPS, the net gain is in actual at RM 480m after taking into account write back provision on KHSB, resulting KPS will increase it NTA by at least 41sen (RM193m) or as much as 100sen!! (RM480m).

Another wild cards is possible divestment in its water concession and pending JV with SP setia in its Golf business to be develop into Eco theme property development, which KPS stand to derive at least 200m or 13% of total GDV.

About MKland, still trading far below NTA of 91sen or even lower if take into account RNTA of RM 1.56-2.00. Current share price trading at just 35sen seem too good to be true!? Perhaps MK land second shareholder dispose its share through open market is one of the causality limit its performance.

MK land second largest shareholder, Kasi initially hold about 25% stake in Mkland under personal account 11.8%; pledge to CIMB 6.4% and have two pledge account with Bank Mumalat, 3.8% and 2.5%. I'm suspecting that kasi MKland stake pledged at Bank Muamalat has disposing its stake progressively through open market probably due to these bank is unlike investment bank, may no longer accept kasi MKland stake as collateral.

Based on latest kasi stake in MKland down to at 19.8%, it could be the stake from its own account 11.8% + pledged under CIMB account 6.4%. With that, i suspect kasi stake in Bank Mumualat only left 1.6% only, which i think will be dispose off soon.

MK land have resume dividend payout now, currently trade cum second dividend of 1 sen and assume there is another final dividend of 1 sen to be announce together with Q 4result, MK land annual dividend could be as high as 3 sen (1 st interim + 2 interim and final dividend), yield at 8.8%!

Anonymous said...

Hi Alex

Just tp update with you about KPS. It have announce higher take over price by KDEB for its stake in KHSB, up 10% from 76sen to 83.6sen.

KPS will partly utilize the proceed from KHSB disposal to pay special dividend to shareholder. SPECIAL DIVIDEND : 26.67sen

If take into account cum final dividend of 2 sen, total dividend payable will be as much as 28.67sen. Based on current share price of 1.42, the total cash dividend work out to more than 20% dividend return!!

vincent chua said...

Hi Alex,

What do you think of Kfima?
Chart wise looks like starting a down trend.

Thanks.

Alex Lu said...

Hi hng

You certainly made a strong case for KPS and MKland. From your information, I am more convinced about KPS. While MKLand is attractive with low PB multiple, that value must be translated to better result. We have seen MKLand languishing in semi-comatose position for years and I don't think it is about to change. Kasi's possible selldown may be the reason for the poor price movement. If that's true, we cannot be sure the selling will end soon.

On the other hand, KPS is taking action to realize its investment. These include the disposal of KHSB, investment in water assets and entering into a JV to develop the land currently used as Perangsang Templer Golf Club in Templer Park.

KPS has broken above the strong horizontal resistance at RM1.40. Its next resistance levels are RM1.75, RM2.00 & RM2.10.

Alex Lu said...

Hi vincent chua

I think of Kfima is still in an uptrend line, with support at RM1.90. If it violates that level, it may go into either sideway or downtrend. A downtrend may begin if the stock drops below RM1.75.