For QE31/710/2018, Apollo's pre-tax profit rose 20% or 32% y-o-y to RM5.0 million while revenue was mixed- up 8.3% q-o-q but down 10.3% y-o-y to RM47 million. Revenue dropped y-o-y mainly due to decrease in sales orders from local markets. PBT rose y-o-y due to lower operating expenses and higher forex gain in the quarter. (Note: Apollo's latest result was announced on December 27, 2018.)


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 2 quarters may be a sign that improved operational efficiency may be starting to bear result.


Graph: Apollo's last 45 quarterly results

Financial Position

As at 31/10/2018, Apollo's financial position is very healthy with current ratio of 14 times and gearing ratio of 0.09 times. Its cash balance stood at RM113 million or RM1.41 per share.

Valuation

Apollo (closed at RM3.68 last Friday) is now trading at a PE of 23 times (based on last 4 quarters' EPS of 15.88 sen). Excluding the cash balance of RM1.41 per share, Apollo would improve to 14 times. This, plus a dividend yield of 5.4%, make Apolloa a fairly attractive stock.

Technical Outlook

Apollo is now resting n the accelerated uptrend line, S1-S1 at RM3.60.

Chart: Apollo's monthly chart as at Jan 4, 2019 (Source: Malaysiastock.biz) 

Conclusion

Based on improved financial performance, strong financial position, attractive valuation & mildly bullish technical outlook, Apollo is a very good stock to consider for long-term investment.

Note:

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.