This article first appeared in The Edge Financial Daily, on December 29, 2015.
Apollo Food Holdings Bhd (-ve)
SHARES of Apollo Food (Fundamental: 1.95/3, Valuation: 2.0/3) have risen by 17.7% to RM5.89 since it was last recommended by InsiderAsia on November 6. The company is expected to announce its 2QFYApril2016 earnings results by Thursday.
For 1QFY2016, net profit grew an outsized 95.7% y-y to RM11.2 million — despite a 3.3% decline in sales to RM49.9 million — driven by foreign exchange gains and lower operating expenses. It also paid a first and final dividend per share of 25 sen for FY2015, giving a decent yield of 4.4%.
Apollo Food is a leading manufacturer and exporter of compound chocolate confectionary products and layer cakes in Malaysia, and a strong regional player. Exports, mainly to the Asia Pacific region, account for about 40-50% of its sales, making the company a prime beneficiary of the ringgit’s depreciation.
It has a debt-free balance sheet with cash of RM100.0 million or RM1.25 per share.