Good earnings growth in which 2QFY16 +62%yoy to RM12.4m
Positive review by icon8888 blog on 3-Dec-2015 and 4-Dec-2015 with the full reading here
http://klse.i3investor.com/blogs/icon8888/87489.jsp
and
http://klse.i3investor.com/blogs/icon8888/87581.jsp
Fidelity Management and Research emerged as substantial shareholder. Details of the news here http://www.theedgemarkets.com/my/article/fidelity-mgmt-and-research-now-substantial-shareholder-ajinomoto
What if you have missed the boat on AJINOMOTO 50% surge? Admittedly the information above is useless as you can now only see the share price surge without enjoying it. But it is not too late.
APOLLO fundamentals are similar (if not better) than AJINOMOTO. Here’s the three similarities between these two companies:
Both companies are from food industry. APOLLO sells chocolate wafer products and layer cake. AJINOMOTO sells Monosodium Glutamate. Both are unhealthy yet the consumption trend is very stable and likely is growing.
APOLLO 1QFY16 earnings +96%yoy to RM12.9m. It means that APOLLO earnings in one quarter alone (RM12.9m) is more than two quarters from AJINOMOTO (RM12.4m). Also, APOLLO’s growth is much stronger at 96%yoy against AJINOMOTO’s 62%yoy.
APOLLO overseas revenue as a % of total revenue is greater at 42% against AJINOMOTO’s 37%. It was mentioned in AJINOMOTO 2QFY16 result that “Operating profit increased from RM9.2 million in the corresponding quarter last year to RM14.2 million in the current quarter mainly due to higher sales and better profitability by encouraging export sales.” Out of AJONOMOTO 1HFY16 sales of RM189.5m, RM70.9m (or 37%) is from overseas market. Now look at APOLLO. In FY15, APOLLO revenue from overseas market is RM90.1m or 42% of the Group's total revenue of RM212.6m. You can verify this from FY15 Annual Report Page 96.
APOLLO theoretically worth RM6.80
I am looking at FY16 net income to grow by 75% to RM44.3m on the back of the improved efficiency and higher USD this year. As the number of shares is 80.0m, FY16 EPS should hit 55.38 sen. Fair PE is 12.3x in line with the Company's average 5-year historical PE. By multiplying 12.3x to 55.38sen, you will get RM6.81 (round up to RM6.80).
Bullish case worth RM7.50 if Fidelity Management and Research spot this company. I am making an open call here to Fidelity to invest in APOLLO. Agreed that AJINOMOTO is a good company, but based on the points highlighted above I am confident that Fidelity will be interested to at least check out APOLLO.
Buy and sell at your own risk, this is only an academic observation.
APOLLO (6432) - APOLLO - The next AJINOMOTO
Source: http://klse.i3investor.com/blogs/genzinvestor/88628.jsp
