Tuesday, August 28, 2018

Apollo: Earning Rebounded

Result Update

For QE31/7/2018, Apollo's pre-tax profit dropped rose 207% or 11% y-o-y to RM4.2 million on the back of lower revenue which dropped 6% q-o-q or 8% y-o-y to RM43 million. Revenue dropped y-o-y mainly due to decrease in sales orders by export markets. PBT rose y-o-y due to lower operating expenses incurred in this quarter.

Table: Apollo's last 8 quarterly results

Apollo's revenue, profits and profit margins have been on a steady decline for the past 3 years. The improvement in the profits and profit margins last quarter may be a sign that the prudential measures to raise its operational efficiency may be starting to bear result.

Graph: Apollo's last 44 quarterly results

Financial Position

As at 30/6/2018 31/7/2018, Apollo's financial position is very healthy with current ratio of 15.6 times and gearing ratio of 0.09 times. Its cash balance stood at RM101 million or RM1.27 per share.


Apollo (closed at RM4.36 yesterday) is now trading at a PE of 30 times (based on last 4 quarters' EPS of 14.36 sen). Excluding the cash balance of RM1.27 per share, Apollo would improve to 22 times. While its PER is fairly demanding, it pays good dividend of 20 sen last year, which translates to a dividend yield of 4.6%.

Technical Outlook

Despite the price decline for the past 2 years, Apollo is in a long-term uptrend with support at RM3.90-4.00.

Chart 1: Apollo's monthly chart as at Aug 27, 2018 (Source: ShareInvestor.com) 

Apollo is still in an intermediate downtrend line, RR with resistance at RM4.40.

Chart 2: Apollo's weekly chart as at Aug 27, 2018 (Source: ShareInvestor.com) 


Based on improved financial performance and strong financial position, Apollo is a good stock to consider for long-term investment.


I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

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