APM – Fundamental Analysis (5 Feb 2015)

APM Analysis:-

Excel – http://1drv.ms/18PYwRO

Notes – http://tinyurl.com/pruyneu

My View:-

  • Valuation
    • 5Y-DCF
      • Good Scenario: 8.92 (Fair value uncertainty: LOW)
      • Base Scenario: 8.01 (Fair value uncertainty: LOW)
      • Bad Scenario: 7.19 (Fair value uncertainty: LOW)
      • Ugly Scenario: 6.47 (Fair value uncertainty: MEDIUM)
      • If growth of FCFF in the next 5 years is -8.3%, APM still worth 4.96.
    • Absolute EY%
      • Trailing:
        • FY13 (EPS: 0.633) – Fair value 5.67 (Fair Value Uncertainty: MEDIUM)
        • R4Q (EPS: 0.504) – Fair value 4.52 (Fair Value Uncertainty: VERY HIGH)
      • Forward:
        • FY15 (EPS: 0.493) – Fair value 4.42 (Fair Value Uncertainty: VERY HIGH)
        • FY16 (EPS: 0.504) – Fair value 4.52 (Fair Value Uncertainty: VERY HIGH)
      • EPS applied to reach the current stock price (4.96): 0.553
  • In short term, due to some uncertainties in Malaysia economy, APM business may slow down. Thus, the valuation for short term (Absolute EY%) is less attractive.
  • On the other hand, in longer term, looking at their rich cash flow, I believe APM is still undervalued.
  • In my opinion, APM business is cyclical, and prone to economy conditions.
  • I will keep APM in my Research List, and may study further in the future. At this moment, I am looking for new defensive stocks.

Latest Financial – Q3 2014 Financial Report (26 Nov 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1805693

At the time of writing, I did not own shares of APM.

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