Apex Equity Holdings Bhd
Shares for Apex Equity have done very well, rising from RM1.11 at the start of this year to as high as RM1.59 in late-October before paring gains amid a broader market sell off. The gains, in part, reflect the company’s improved earnings.

In 2013, revenue surged 35.1% to RM64.0 million while pre-tax profit increased 4.7% to RM31.2 million. The increase in sales was mainly due to higher revenue from the money lending and property development segments.

For 9M2014, revenue rose 26.3% y-o-y to RM60.9 million, while pre-tax profit jumped 40.5% to RM29.3 million, mainly due to higher contributions from stock-broking and money lending business.

The stock is now trading at its book value of RM1.42. Nevertheless, the company’s assets are understated as it holds large tracks of land acquired at low prices. Apex Equity has 100.1 acres of land in Sepang with a book cost of RM12.7 million, or RM2.91 psf, and 99 acres in Hulu Selangor carried at RM10 million, or RM2.31 psf. Both were acquired in 1995 and 1996, and have not been revalued since. It also has 5.9 acres of land in Klang acquired in 2003 with a book cost of RM30.5 million or RM118.47 psf. Unlocking these values could provide the next leg up for the stock. 

Meanwhile, shareholders can expect to earn relatively attractive yields. Dividend per share totalled 8 sen in 2013, translating into a higher than market average yield of 5.6%. 

The company’s balance sheet is also improving. Net cash stood at RM87.9 million or 43 sen per share as at end-Sept 2014, up from RM36.2 million in 2012. The Edge Research gives Apex a fundamental score of 2.7 out of 3.

The stock is trading at a trailing 12-month P/E ratio of 8.8 times. 

This article first appeared in The Edge Financial Daily, on December 17, 2014.