For QE31/12/2010, APM's net profit dropped by 4.2% q-o-q but rose by 19.3% y-o-y to RM30 million while its turnover dropped marginally by 1.2% q-o-q but rose by 7.1% y-o-y to RM288 million. We can see that APM 's top-line & bottom-line have slid in the past 2 quarters. This is quite similar to what we saw in TChong over the same periods.
Table: APM's last 8 quarterly results
Chart 1: APM's last 11 quarterly results
Valuation
APM (closed at RM5.10 yesterday) is now trading at a PE of 8 times (based on last 4 quarters' EPS of 63.6 sen). At this PE multiple, APM is deemed fairly valued. I believe a fair PE multiple for auto stocks is about 6-10 times, depending on growth potential.
Technical Outlook
APM broke its accelerated uptrend line at RM5.45 in January. APM has good horizontal support at RM5.00 and thereafter it may test the uptrend line that started in July 2009 where the support si at RM4.30.
Chart 2: APM's weekly chart as at Feb 25, 2011 (Source: Quickcharts)
Conclusion
Based on deterioration in the technical outlook & financial performance, I think one should take some profit on this investment. A good level to sell would be about RM5.30-5.50. However, we do not have to be too aggressive in our selling as the stock is still fairly valued.
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