AP Oil

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AP Oil has released its financial report for FY2014:
http://infopub.sgx.com/FileOpen/APOIL_FU...eID=335898

Given the latest market price of $0.205, I find AP Oil to be a value buy for the following reasons:

1) AP Oil has grown its equity from $10.5 mio in 2001 when it IPOed, to $46.3 mio in 2014.

2) It has a low P/E of 6.6.

3) It has been generating free cash flow for the past five years.

3) It zero debt.

4) Its cash balance of $31.3 mio is only slightly less than its latest market cap of $33.7 mio (at $0.205 per share).

don't forget, read the earlier posts on this thread.

1) History of poor dividend payout, past few years despite good cash flow and not much capex, $0.005 div = yield of 2.44% (EPS is $0.228 leh, cannot even payout half meh?)

2) Fat Paycheck for directors / management.

Waste of time to park your money here.

However now that Net cash is so high level, can keep on radar and wait for signal from directors to G.O. (share buy-backs and director open market purchase) as they will want to privatise on the cheap. This is the next logical step given that they have been marginalising OPMI for so long and the same people are still running this ship.

i use the latest annual report
http://www.apoil.com.sg/UploadedImg/file...AR2012.pdf

it shows renumeration to director and management is 4.2million,

comprehensive income is 4.7 million

dividend is 0.83 million

so if we take 4.2/(4.2+4.7)=47% of income is going to management

about 0.83/(4.2+4.7)=9% of income is going to shareholder

i dont see how this ratio is going to change, after so many years,

there is nothing you can do about it, as the management controls almost 50% of it, they figure out it is more profitable to pay the profit to themselves then to pay out as dividend

yesterday FS, shows it makes 2.88 cents, at 9% ( profit +salary), return to shareholder, is about 0.5 cents, assume the growth of income 4%, let say require return is 10%

using discounted dividend valuation the worth of the share is 0.5/(0.1-0.04)=8.33 cents

I dont see how there is any change to this company structure in the future, the son is groom to takeover the company, the milking can continue for a long time , given these dividend and structure, it is cheaper just to let the minority shareholder keep the share then to takeover