Key Highlights for APM Q3 2024:

• Revenue Growth: Revenue for Q3 2024 increased by 5.2% YoY to RM545.2 million, driven by stronger OEM segment demand and improved export market conditions. However, revenue growth was partially offset by a weaker Replacement Equipment Market (REM) performance in Malaysia.

• Profit Margins Under Pressure: Profit before tax (PBT) declined by 10.0% YoY to RM38.1 million due to unrealized foreign exchange losses arising from the strengthening Malaysian Ringgit against major currencies.

• Earnings Per Share (EPS): EPS fell to 9.55 sen in Q3 2024 compared to 13.25 sen in the previous corresponding quarter, reflecting a 27.9% YoY decline.

Financial Highlights:

Net Cash Position: RM313 million as of September 2024.

Gearing Levels: Increased borrowing following the issuance of RM200 million Islamic Medium-Term Notes (IMTN) in Q2 2024.

Dividend Payment: No dividends declared during the quarter, aligning with the Group’s strategy to preserve cash for future investments.

Conclusion: Intrinsic Value stays at RM3.00

Despite strong performance in key divisions, the unfavorable forex environment and weaker REM demand weigh on overall profitability. Investors may want to await signs of stabilization in regional markets and clearer catalysts for growth.

I am currently using a PE ratio of 10x, as the growth is expected to slow down. Based on the estimated 2024 EPS of 30 sen, this calculation yields a value of RM3.00.

Strengths: APM's diversified operations, solid balance sheet, and resilience in the OEM segment provide stability.

Risks: Continued currency volatility, rising competition in the REM space, and geopolitical uncertainties in ASEAN markets pose challenges.

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I am one of the top 10 investors on i3investor, with a 23.65% portfolio return in the first 10 months, outperforming the FBMKLCI's 11.14%

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