AP Oil

[karlmarx]

I check back the SGX announcement and annual reports - no mention of special, just say final dividend of 0.75c

Indeed it is. Pardon my poor memory. And thanks for pointing that out.

[karlmarx]

All of the above are my own personal opinions, and in this chaotic market environment where every index is down and more bloodshed is likely, AP Oil forms a sort of a hedge of my own. Why do I say so?
- huge amount of cash and supremely ready for the downturn, no debt to cover which means 0 chance of filing for bankruptcy practically
- geography of its business is widely diversified (SG market is only around 55% of its business)
- PE ratio is very reasonable and in times of market sell-off, in general companies with higher PE ratio will see bigger declines in share value
- the lubricant industry will never see 0 demand and AP Oil is a longtime steward
- why not get paid 4% dividend while waiting for the market to recover in the years to come before redeploying capital elsewhere? with such a huge cash hoard and very reasonable dividend payout ratio, board will never need to borrow debt to maintain dividend yield. (you've seen "high dividend companies" like Starhub cutting dividend as it is unsustainable)

Unless the cash is fake -- which it could well be, since they have been slow to distribute it as dividends -- there is indeed little chance of company filing for bankruptcy. If the cash is real, then APO's operating businesses -- which are profitable -- are selling for free.

While this looks like a 'no-lose' proposition, whether there is any value to be gained by a shareholder will depend on the global/regional economy in general, and APO's ability to improve earnings and dividends, in particular.

[sillyivan]

All of the above are my own personal opinions, and in this chaotic market environment where every index is down and more bloodshed is likely, AP Oil forms a sort of a hedge of my own. Why do I say so?
- huge amount of cash and supremely ready for the downturn, no debt to cover which means 0 chance of filing for bankruptcy practically
- geography of its business is widely diversified (SG market is only around 55% of its business)
- PE ratio is very reasonable and in times of market sell-off, in general companies with higher PE ratio will see bigger declines in share value
- the lubricant industry will never see 0 demand and AP Oil is a longtime steward
- why not get paid 4% dividend while waiting for the market to recover in the years to come before redeploying capital elsewhere? with such a huge cash hoard and very reasonable dividend payout ratio, board will never need to borrow debt to maintain dividend yield. (you've seen "high dividend companies" like Starhub cutting dividend as it is unsustainable)

Unless the cash is fake -- which it could well be, since they have been slow to distribute it as dividends -- there is indeed little chance of company filing for bankruptcy. If the cash is real, then APO's operating businesses -- which are profitable -- are selling for free.

While this looks like a 'no-lose' proposition, whether there is any value to be gained by a shareholder will depend on the global/regional economy in general, and APO's ability to improve earnings and dividends, in particular.

In your opinion, how likely will the cash be fake? That would constitute as fraud wouldn't it, since it is simply sitting in the balance sheet Cash & Cash Equivalents.

[GenS70]

negligible la

decent people I feel

it is just very hard to have a lot of imagination in running this biz

[karlmarx]

I like to always assume the worst. Even then, the worst case scenario I can conjure sometimes still turn out to be too conservative.

While you can never really tell, the Ho family are indeed, probably quite decent.

Here's a Horatio Alger story of Ho senior, written almost 20 years ago, prior to the company's IPO:

http://ir.zaobao.com/apoil/news/apoil270501.html

[sillyivan]

I like to always assume the worst. Even then, the worst case scenario I can conjure sometimes still turn out to be too conservative.

While you can never really tell, the Ho family are indeed, probably quite decent.

Here's a Horatio Alger story of Ho senior, written almost 20 years ago, prior to the company's IPO:

http://ir.zaobao.com/apoil/news/apoil270501.html

Thanks for the share, good read.

[sillyivan]

With the crash of crude oil prices, this black(white in this case) swan event should result in a very significant reduction in raw material costs for AP Oil. This would in turn boost their gross profit margins and increase their bottomline profits assuming not all cost savings are given to the end customer. If they do reduce selling prices for the end customers, it could also see an increase in topline revenue due to bulk buying. Am i missing anything out?

Could this be an interesting tailwind for AP Oil's turnaround story to play out? If it does, we could very well see a re-rating soon.

[dydx]

AP Oil has a 100% subsidiary GB Chemicals Pte Ltd which is engaged as a manufacturer/supplier of specialty cleaning chemicals to the industrial, hospitality, airline catering, aircraft and transportation industries..
http://www.gbchemicals.com.sg/default.aspx

It appears GB Chemicals should benefit from the current COViD-19 outbreak.

[¯|_(ツ)_/¯]

AP Oil
will be announcing its unaudited financial results for full year ended 31 December 2020 via SGXNet after trading hours on 26 February 2021.
https://links.sgx.com/1.0.0/corporate-an...cc3d5c4ad1



Stay home and stay healthy, everyone.

[Reenat]

Is there any positive announcement on AP Oil... While GB might be positive, was AP Oil caught in the oil trading saga?