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APM: Moderating growth assumption (KingKKK) - (New Intrinsic Value is RM3.80)

Publish date: Thu, 14 Mar 2024, 08:16 PM

APM announced its earnings on 27/2. BAUTO released earnings yesterday which shows first year on year decline in 3 years. How will these impact APM intrinsic value?


1. APM revenue -9.3% quarter to quarter in Q4 last year, net profit -14.9% quarter to quarter to RM22.1m.

2. APM's revenue and PBT were both lower than expected.

3. BAUTO 3QFY24 profit was down 19% year-on-year. Revenue fell 11% quarter to quarter with business volume down 12% quarter to quarter.


1. APM year to year EPS grew 172% to 11.28 sen. 

2. Cash increased year-on-year (yoy) and qoq:

Q4: RM478m, Q3: RM414m, 2022 = RM353m.

3. Debt reduced year-on-year (yoy) and qoq:

Q4: RM118m, Q3: RM128m, 2022 = RM125m

4. Dividend announced of 11 sen is higher than last year's 7 sen.

What I think?

1. Q4 overall is good, but the growth is not as strong as I think.

2. 2024 should grow but at lower than earlier anticipated.

3. Long-term outlook remains good. Malaysian just love cars, each year add at least 600,000 cars on the road. APM should benefit from this trend.

4. The new intrinsic value is RM3.80. I am using PE of 12x now as the growth should slow down. Given the estimated 2024 EPS of 32 sen, this calculation results in a value of RM3.84. Round down I get RM3.80.

5. My thinking is if BAUTO cannot grow year on year in the latest quarter, eventually that slowdown will affect APM as they are in the same industry.

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