AmResearch downgrades APM to 'Hold' following its 1Q15 performance

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KUALA LUMPUR (May 15): AmResearch has downgraded APM Automotive Holding Bhd (APM) to “Hold”, with a lower fair value of RM4.90 (from RM5.60) and said the company's performance in 1Q15 was below expectations.

APM reported core net profit of RM21 million, accounting for only 17% of the research house’s estimates and 19% of consensus.

AmResearch said APM’s performance was impacted by persistent price pressure, as well as hiccups in the production of the Iriz, APM’s key customer and model that it supplies to.

“While we had expected APM to attain higher revenue per car set from the Iriz supplies, the disappointing production volume of the Iriz will dampen prospects further out. Besides the halt in production, end of sales of the Iriz have also been lacklustre.

“We adjust our numbers lower by 20%/11%/6% for FY15F/16F/17F to reflect expectations of lower supply volumes and we now reflect the stronger USD in our projections as we think price adjustments with key customers (from currency volatility) is unlikely in the near term," it said.

APM’s share price dipped 0.97% or five sen to RM5.10 as at 10.18am today with 7,000 shares done.