APOLLO FOOD HOLDINGS - Memories Of Our Childhood

Do you still remember the snacks above? I used to eat lots of these snacks since I was a 4-year-old child. They were so crispy & tasty, yummy... Even now, sometimes I still could not resist to have them when I see them in mini market, lol...

Anyway, I am not here to promote these snacks, but to talk about the company which make them, Apollo Food Holdings. APOLLO is 1 of the most attractive company among the consumer industry in terms of PE and dividend yield. APOLLO is trading at 12x of historical PE compare to most of its peers of over 16x. Dividend yield wise, APOLLO paid out quite pleasant dividend of RM0.20  per share last December, equivalent to 6.1% of yield to its current price.

APOLLO's business is divided into 2 segments: local market & export market, i.e. India & China. Foreign business is important to APOLLO because their export business counts for almost 50% of their total revenue recently, with the revenue growth of 15% for the past 2 years. Besides, the profit margin of 20% for foreign market is higher compare with local market which is about 5%. I see their export business will be their main focus to generate more income for the next few years.

On the other hand, the balance sheet of APOLLO is pretty strong, with net cash of RM56.59 million, which is equivalent to RM0.70 per share, without any outstanding borrowing. 

I think APOLLO is going to announce the dividend payment in the near term. Refer back to their payout history & their cash position, it should not be less than RM0.20 per share. Due to the rise of consumer stocks, M&A activities between F&B companies recently, and good dividend payout, I believe the stock price is still undervalued. Should the company be able to achieve RM0.35 earnings per share next year, I see  the price will be worth RM3.50 & above. Anyway, the liquidity of APOLLO is low, this is due to its low balance float of 17.8%.

Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.