APFT Bhd (+ve)

WE last featured APFT (Fundamental: 0.2/3, Valuation: 0/3) in “Stocks with Momentum” on August 19 at 23.5 sen. It has since retraced slightly, closing at 22.5 sen last Friday. APFT was one of the most traded stocks, with more than 25.3 million shares changing hands. 

Investors should exercise extra caution while trading shares of APFT as it has been ‘Red Flagged’ by our system, due to its low fundamental and valuation scores. 

APFT owns and operates a flight education and training academy — Asia Pacific Flight Training Academy — at Sultan Ismail Petra Airport in Kelantan. It also provides mechanical engineering works and services.

On September 4, APFT entered into a memorandum of understanding with University Selangor to collaborate efforts in providing skilled and professional licensing engineering training for national and international aviation industries.

The company has up to February next year to complete its private placement to raise up to RM23.6 million. It initially allocated 40.6% of the proceeds to purchase oil and gas equipment with intention to bid for the Refinery and Petrochemical Integrated Development (RAPID) project by Petronas.

However, due to weak oil prices and the delay in RAPID project, APFT decided to revise its utilisation plans. Accordingly, 60.0% of the proceeds will be used for working capital, 25.4% for aircraft purchase, 13.6% for loan repayment and the balance 1% for proposal expenses.

The delay in the RAPID project has widened APFT’s net loss from RM19.7 million in FYMar2014 to RM22.5 million in FY2015. This was mainly due to impairment of goodwill on consolidation of RM10 million from the acquisition of PT Technic (M) Sdn Bhd (PTTSB), an oil and gas company.

The stock currently trades at a price-to-book of 2.49 times. The company has not historically paid any dividends. 

This article first appeared in digitaledge Daily, on September 21, 2015.