STOCK FOCUS OF THE DAY
APM Automotive : Slow sales, high costs hit bottom line HOLD
We maintain a HOLD on APM with a lower fair value of RM3.20/share. This is based on a lower projected earnings pegged to an unchanged FY18F PE of 11x – two notches below its three-year average historical forward PE of 12.7x. We cut our FY17F-FY19 EPS projections by 9-26% following a dismal 1H17 showing. The group's net profit for the YTD period fell 17% YoY to RM13mil.
Overall, the impact of an exceptionally weak second quarter (revenue -10% YoY, net profit -61% YoY) was partially cushioned by a stronger first quarter (revenue +6% YoY, net profit +13% YoY). This has prevented the group's YTD profit from falling even more drastically. The group declared a dividend of 4.5 sen/share. We believe the group will continue its trajectory of high capex towards reaching its revenue target of RM2bil per annum by 2020. On average, it has spent 8% of its annual revenue (about RM98mil/year) on acquisitions and expansion.
Others :
Malakoff Corporation : Underwhelming results yet again HOLD
TH Plantations : Hit by falls in CPO and PK prices in 2QFY17 HOLD
Star Media Group : A bleak story in print SELL
STOCKS ON RADAR
Prestar Resources, Eonmetall Group,Techfast Hldgs, Comfort Gloves
NEWS HIGHLIGHTS
Scomi : Scomi to merge with energy, engineering units
Perisai : Emas Offshore seeks legal advice on Perisai move
Nestle : Nestle posts higher Q2 revenue
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