Posted by BC > 2012-08-31 15:42 | Report Abuse

I suppose someone has keyed in sell 4.76 by mistake..

Posted by fatty_tang > 2012-12-04 23:17 | Report Abuse

APM is definitely one of the most under-valued stock out there

Posted by kcchongnz > 2012-12-05 07:04 | Report Abuse

fei chai, could you share with us why do you think APM is undervalued?

Posted by fatty_tang > 2012-12-05 11:41 | Report Abuse

still the same old reasons. Low PE, high dividend yield, huge cash pile, low debt, stable earnings, etc...

Posted by kcchongnz > 2012-12-05 11:46 | Report Abuse

Fei Chai, fully agreed with you. APM has been very successful locally. Any idea whether they have been doing well or not in their foray to Vietnam and Indonesia?

Posted by Moochie > 2012-12-28 11:36 | Report Abuse

I agree that they have low PE, high dividends, healthy balance sheet. In addition to that they are one of few malaysian companies which have exposure to other markets, stand to benefit from malaysia being highlighted as an auto substitute hub for Thailand following the floods and they also stand to benefit from their parent company bringing in new models for next year also they still have outstanding tax credits which could see good dividend payouts if they wanna take advantage of it before they expire in 2013.

Posted by abc_111 > 2013-01-15 21:21 | Report Abuse

still can buy at 5.16?

Posted by fatty_tang > 2013-01-16 08:00 | Report Abuse

it would be best if they can do a bonus issue if not special dividend :)

Posted by kcfan > 2013-01-16 08:04 | Report Abuse

Good stock must keep.Congrats

Posted by kcfan > 2013-01-16 23:27 | Report Abuse

强势汇率降低成本 令吉升值有利汽车业
http://www.nanyang.com/node/504870?tid=462

Posted by Moochie > 2013-01-18 11:23 | Report Abuse

Share price has done well in recent days but looks like a slight correction might be on the cards today going into the weekend. Anyone thinks the momentum will continue into next week?

Posted by fatty_tang > 2013-01-18 12:09 | Report Abuse

I'll sell if it reaches my target price of rm6. Quarter report announcement will be on February, while dividend announcement will be on April. In between surely there will be our general election.

Posted by greatdreamer > 2013-01-18 12:52 | Report Abuse

Strong price run up from 31/12/12 RM4.71, may due for minor correction. Price may sustainable for a while on expectation on robust January vehicle sales figure, ahead of Feb CNY.

Posted by Moochie > 2013-01-18 15:58 | Report Abuse

Thanks for the input. Was just reviewing this counter in light of its recent run over the past 2 weeks. I always thought it was an undervalued name with it being net cash at something like 2 bucks a share coupled with the tax credits which are expiring this year and just thought it was a good time to evaluate or re-evaluate my exit price. Initial PE was something like 7x while its peers are trading in the region of 12-13x, now they're in the 8-9x mark. Thanks again.

Posted by greatdreamer > 2013-02-22 15:15 | Report Abuse

Sharp correction from RM6 to now 22/2/13 3pm @ RM5.20. What has gone wrong with stock? Fundamentally, RHB last week reveal the weak link of APM. In short are as follows:

1. APM is still reliant on sales to domestic OEMs. APM’s revenues mainly come from domestic OEMs (about 75%) of which about 65% are derived from sales to Proton and Perodua.

2. APM is a price taker. With the domestic OEMs under pressure to be more cost competitive, Perodua and Proton have implemented a 15% price reduction across the board beginning 1 Jan 2013 without any corresponding volume undertaking.

3. Limited export and overseas sales. APM has found it difficult to make inroads into regional automotive markets whether through exports or overseas operations. Japanese and other major global autoparts vendors already dominate regional automotive assembly hubs in Thailand and Indonesia.

4. Looking beyond organic growth. The founders of APM have historically managed the company conservatively and only growing organically.

Posted by kcchongnz > 2013-03-13 10:44 | Report Abuse

APM
Let us examine how analyst values a company, APM. The table below shows the target price (TP) given by AMMB Investment bank:
Date Price Target Price Upside
28/2/2013 5.33 5.40 +0.07 (1.3%)
31/1/2013 6.00 6.50 +0.50 (8.3%)
29/1/2013 5.70 6.50 +0.80 (14.0%)
15/1/2013 5.03 6.30 +1.27 (25.3%)

Exactly 2 months ago, AMMB provided a bold TP for APM at RM6.30 when APM was trading at RM5.03, a 25.3% upside. AMMB must have seen the value in APM to give such TP then. That appeared to be a good call as its share price rose up to RM5.70 two weeks later on 29/1/2013. It then increased the TP for APM by 20 sen to RM6.50 when it was trading at RM5.70. The share price of APM jumped again to RM6.00 two days later and AMMB reaffirmed its TP. A month later on 28/2/2013, AMMB downgraded APM with a TP of just RM5.40, or a 17% downgrade of the TP. What happen?

You can see the share price of APM was trading only at RM5.33 on 28/2/2013. AMMB would not want to appear as a fool to maintain its TP of APM at RM6.50 when the market said it is worth only RM5.33, would they? Those analysts working at AMMB are top-notch finance graduates and MBAs and whatnot. But what has really changed?

APM announced its final results for financial year ending 31/12/2012 on 27/2/2013. The turnover for 2012 of RM1198m was marginally higher by 1.4% and profit attributed to shareholders by 5% to RM113.6m, or 56.4 sen per share. The reasons given was the adjusted competitive pricing to OEMs and revaluation of inventory to reflect sudden depreciation of the Japanese Yen in fourth quarter. APM increases its dividend payment from 22 sen to 32 sen per share this year, giving a dividend yield of 6.4%.

The question is whether it is justifiable to downgrade the TP of APM from RM6.50 to RM5.40, or 17% in a matter of one month? Has the fundamentals of APM changed so drastically in such a period of one month, just because the results showed a drop of 5% profit for 2012? Or is it because the market price told you so? What is the basis?

Posted by greatdreamer > 2013-03-13 23:18 | Report Abuse

THe drastic downgrade of TP from RM6.50 to RM5.40 within a month, reflect a slap on the broker house face. The sharp downgrade to enable the broker house to rectify the wrong assumption of overly high GP margin used in previous assessment on making the profit projection of APM.

In fact, b4 the 4Q12 result announcement, there are rumours in i3portal that APM is under pressure to cut selling price to customers.

On SWOP analysis, unsual high GP margin of APM for the past 2 years is not sustainable going forward, as APM derived 65% from only 2 customers, proton & peradua. Therefore, APM is only a price taker.

APM has found it difficult to make inroads into regional automotive markets whether through exports or overseas operations. This indicate the APM is not competitive on regional basis, but some extent, still competitive in domestic market.

In conclusion, most of the broker house are over optimistic on the APM biz outlook in their previous asessment. In reality, APM are still a domestic players. When margin become high, Proton & Peradua will knock the door and ask for price reduction. Want to be a Asean big players, APM still very miles aways. However, APM has a very light assets balance sheet, generate huge cashflow every quarter. The cashflow can support generous dividend and share price. Going forward, APM should view as a dividend stock instead of growth stock.

Posted by Ng Lin Tat > 2013-03-14 08:25 | Report Abuse

Quoting from AMBank research paper.

4Q12’s reported earnings (-26% QoQ) were dragged down
by several exceptionals:- (1) Inventory devaluation and
marked-to-market forex loss (RM4.3mil); (2) VSS cost
(RM2.3mil); (3) Relocation of extrusion plant (RM1mil). The
inventory impairment was a one-off event as 4Q12 saw
rapid deterioration in JPY:MYR rates.

• Price adjustments to OEMs seem to have been reflected in
earnings earlier than expected, probably due to OEMs
building up parts inventory 2-3 months ahead of actual
production. The impact from the price adjustments in 4Q12
was c. RM3mil.

• This factor will likely continue to be a key drag on FY13
earnings. We gather from industry sources that major
OEMs have been pushing for up to a 15% reduction in
parts prices from vendors.

• We have trimmed FY13F-14F earnings by 25%-30% to
reflect selling price pressure and delayed contributions
from the APM-IAC venture; though going forward, this
could be partly compensated by cheaper imports from
cheaper JPY and USD. While there are usually price
adjustments with key customers for changes in FX, the
sharp price reduction already taken ahead of this suggests
a weak case to do so.

They are trying to break out from Msia I guess. But so far, the success is slow. But at least can see they are trying with all the JV they setting up with the big boys. I also think if TCHONG made it in IndoChina, it may be good for APM as well.

If the government's drive to push Msia as a green auto hub becomes a reality (after GE13 of course), business will be good for APM for them to supply to the customers.

http://www.apm-automotive.com/clientele.htm

Revenue for the past 4 quarters .
293,058
296,753
307,688
300,976

We can see a only a slight drop in latest revenue (Q2Q). So this is that "15% price reduction from OEM" effect already ? If this is the full effect then I think should be ok.

As for the balance sheet, it's too nice. Company has a net 400m cash. And S108 tax credit expiring in 2013, I cannot remember how much now. But sigh, dividends is just rm0.22 minus tax.

Posted by kcchongnz > 2013-03-14 08:44 | Report Abuse

Welcome on board greatdreamer and Ng Lin Tat. We need more people like you guys in i3 to talk about fundamentals. Good stuff that you have. Actually I like APM's cash flow more than anything else.

It is really difficult to find a public listed company with an established record of producing good free cash flow (FCF). Hence when I stumble into one, I will not miss the opportunity to talk about it. Table 1 below shows the financial performance of APM from 2005 to 2012.
Table 1: Financial performance of APM (thousands)
Year 2012 2011 2010 2009 2008 2007 2006 2005 CAGR
Revenue 1198475 1182069 1178846 918533 943526 839243 899817 970645 3.1%
Net Income 125187 137683 140334 82278 57572 59336 58997 71962 8.2%
CFFO 142124 148280 168427 135198 93358 86941 115901 117082 2.8%
In the seven years period, revenue has grown at a compound annual growth rate (CAGR) of just 3%. Net income however, grew at a higher and more respectable CAGR of 8%. Cash flow from operation (CFFO) is consistently higher than net income, signifying good quality of it incomes. Table 2 below shows the capital expenses each year and the FCF left after that.
Table 2: Free cash flow for APM (thousands)
Year 2012 2011 2010 2009 2008 2007 2006 2005 CAGR
CFFO 142124 148280 168427 135198 93358 86941 115901 117082 2.8%
Capex -47890 -50857 -65857 -34873 -61009 -19396 -44976 -70628 -5.4%
FCF 94234 97423 102570 100325 32349 67545 70925 46454 10.6%

On average, 40% of CFFO is used for capital expenses acquiring assets such as property, plant and equipment to maintain or increase the scope of their ordinary operations. There were still plenty of money, or FCF, left for the company to pay dividend, pay down debts, increase its cash holdings, do some other investments, buy back shares, or simply left in its balance sheet, awaiting for some good investments. Table 3 below shows the amount of dividends paid and cash left in balance sheet.
Table 3: Dividends and cash in balance sheet
Year 2012 2011 2010 2009 2008 2007 2006 2005 CAGR
FCF 94234 97423 102570 100325 32349 67545 70925 46454 10.6%
Dividend 64512 44352 40320 32256 30240 28224 26208 26208 13.7%
Cash 427012 393637 351207 260344 192217 177405 145470 119954 19.9%

APM is able to increase its dividend payout to its shareholders each year with the FCF. It has bought back some of its own shares, spend some money in other investments, and still left with a lot of cash in its balance sheet. Cash has growth by a CAGR of 20% since 7 years ago to a total of RM427m in 2012, or RM2.12 per share. How do we decide how much FCF is good for a company?
Table 4 below shows the FCF of APM in relation to its revenue and invested capital (IC). APM produces excellent FCF as it is consistently at about 8% and 20% respectively of its sales and IC, comfortably above my benchmark of 5%.
Table 4: FCF in relation to sales and invested capital
Year 2012 2011 2010 2009 2008 2007 2006 2005
FCF/Sales 7.9% 8.2% 8.7% 10.9% 3.4% 8.0% 7.9% 4.8%
FCF/IC 19% 20% 24% 24% 8% 16% 17% 11%

KC Chong

Posted by Matsaham Mashuk > 2013-04-08 16:29 | Report Abuse

nice--)uptrend..

Posted by Matsaham Mashuk > 2013-04-15 15:03 | Report Abuse

bullish..

Posted by Matsaham Mashuk > 2013-04-17 09:21 | Report Abuse

uptrend..target 5.50..

Posted by Matsaham Mashuk > 2013-04-18 09:59 | Report Abuse

uptrend continue..

Posted by tonylim > 2013-08-05 10:43 | Report Abuse

..

Posted by tonylim > 2013-08-05 12:03 | Report Abuse

Kcchong any updates in yr book on this one.
Was asked to buy last week at 5.00

Posted by tonylim > 2013-08-05 12:04 | Report Abuse

Another company wt high distributable reserves

Posted by kcchongnz > 2013-08-05 12:06 | Report Abuse

tonylim, my opinion on APM has not changed since my last posting on March 14 above.

Posted by kamal89 > 2013-08-05 21:35 | Report Abuse

already 5.51 can we run now......//

Posted by victoria > 2013-08-06 17:46 | Report Abuse

hold or sell????

Posted by greatdreamer > 2013-08-14 12:32 | Report Abuse

Surprising morning close @ RM5.81, near all year high. Any good news? could its be more dividend soon??

Posted by David Ng > 2013-08-16 12:24 | Report Abuse

upcoming q report should be a dividend q. normally is only 10 cents.

Posted by David Ng > 2013-08-28 17:42 | Report Abuse

bookmarking here for future reference ->

http://cdn1.i3investor.com/my/files/dfgs88n/2013/08/27/1479233407--1084780936.pdf

Posted by greatdreamer > 2013-08-28 19:09 | Report Abuse

The Happy party still on. 2Q13 result above expectation. Annouce special div 30sen. Total interim div is 40sen less tax.

Posted by David Ng > 2013-08-28 23:23 | Report Abuse

Jul-2013 TIV was at record high , so good volume should be secured for 1 of the 3 months for the next reporting period.

Posted by nicole76 > 2013-08-29 09:55 | Report Abuse

Expecting to hit RM6 tomorrow again ;) Good Luck everyone!

Posted by nicole76 > 2013-08-29 10:44 | Report Abuse

Can't wait to receive the special dividend ;) easily TP above RM6!

Posted by jcck79 > 2013-08-29 10:56 | Report Abuse

For those who said APM isn't regional player you're deem fool to yourself ..... we've learn the mistake during 2008 crisis and of course some division on APM still highly rely on OEM market but not all they've starting to divert their customer to Export market and last of all the great pipeline is about to come instead of supplying parts they've a vision to supply the whole system that can further enhance the company earnings but it will take few years for RnD Department to do so.

From former employee of APM

Posted by nicole76 > 2013-08-29 11:29 | Report Abuse

Thanks jcck79 for the inside info ;)

Posted by nicole76 > 2013-08-29 11:30 | Report Abuse

Look at the sales of Almera and Myvi and you'll know how much APM has done over the last year ;)

Posted by Peter Chen > 2013-08-30 10:40 | Report Abuse

Read last sentences of this page http://klse.i3investor.com/servlets/ptres/17460.jsp
Tan chong Motor's exclusive rights to Indochina and Myanmar are well supported by its sister company, APM Automotive, which is one of the top-3 autoparts companies in ASEAN.
http://aseantradinglink.blogspot.com/2013/08/would-jim-roger-invest-tan-chong-gets.html

Posted by maxlim > 2013-09-12 17:49 | Report Abuse

It is possible APM may pay out another round of special dividend in 2H13 – we estimate it still has RM20mil of S108 tax credits expiring by end-FY13, which enables an up to RM80mil payout of tax free dividends. In such an optimistic scenario, APM’s FY13 dividend yield will rise to 16% (92 sen/share).

Posted by Abudance > 2013-09-17 01:12 | Report Abuse

When is the special dividend bring paid, please. Thsnkd

Posted by David Ng > 2013-09-21 17:26 | Report Abuse

TCHONG to built Nissan cars from 2015 in Myammar. Surely got some business for APM there...

Posted by maxlim > 2013-11-06 17:01 | Report Abuse

did any body know when it will pay the 60 sen special div ?

Posted by David Ng > 2013-11-22 14:14 | Report Abuse

hmm , no boring ah . no report from AMBANK and RHB this morning.

2013 2012
Revenue 329,036,000 284,726,000
Pretax Profit 51,877,000 42,262,000
Net Profit 36,329,000 29,665,000
Earnings Per Share 18.56 Sen 15.16 Sen
Dividend Omitted Omitted

9 months ended Sep. 30:

Revenue 952,645,000 840,281,000
Pretax Profit 140,383,000 128,077,000
Net Profit 98,795,000 91,753,000
Earnings Per Share 50.49 Sen 46.89 Sen
Dividend 40.00 Sen 10.00 Sen

Posted by Gemlover > 2013-12-01 22:55 | Report Abuse

APM a good share to buy. Making money since bought at RM4.7 plus good div of 62cts. Going to keep for sometime since company is cash rich and APM may declare high div because Tan Chong need the cash for investing in Myammar and Vietnam plant.

Posted by DLuckyGuy > 2013-12-01 23:03 | Report Abuse

market will be red 2moro. steer clear from danger

Posted by cheongcy > 2014-02-04 13:40 | Report Abuse

The share is still undervalued at RM5.70. My DCF shows it worth RM6.5 at 5% growth rate....

Posted by andylee1919 > 2014-08-28 14:41 | Report Abuse

Wow... change to buy now. Drop so much.

Posted by andylee1919 > 2014-09-02 16:03 | Report Abuse

Drop 10 cents !!!