Apollo- top-line & bottom-line declined

Result Update

For QE31/10/2013, Apollo's net profit dropped 38% q-o-q or 14% y-o-y to RM6.6 million while revenue dropped 16% q-o-q or 8% y-o-y to RM48 million. The decline in revenue & profit was attributed to lower demand from both local & overseas markets.


Table 1: Apollo's last 8 quarterly results


Chart 2: Apollo's last 25 quarterly results

Valuation

Apollo (closed at RM4.98 yesterday) is now trading at a PE of 12 times (based on last 4 quarters' EPS of 42 sen). Apollo is deemed fairly valued.

Technical Outlook

After it broke above its horizontal resistance at RM3.50, Apollo went into a steady uptrend that sent it to a high of RM5.60-5.70. The strong uptrend may have ran its course and the stock is likely to consolidate for a while.


Chart 2: Apollo's monthly chart as at Dec 16, 2013 (Source: Tradesignum) 

Conclusion

Despite the poorer financial performance,  Apollo remained a good stock for a long-term investment based on  reasonable valuation. For that, the stock is rated a HOLD.

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.