Ann: Market Update for Half Year ending 30 June 2022, page-2

APE cannot control the draconian lockdowns imposed by authoritarian mainland communist China in Beijing and especially Shanghai. This results in huge delays in shipping vital components required by motor vehicle manufacturers, and is compounded by compounding delays to container shipping.

Nor can APE control the ongoing semiconductor shortage, although IIRC some efforts in the USA are underway to try to partly remedy this. Taiwan has the major share of production of these items, with the trend to ever more 'intelligent' vehicles seeing demand increase.

The two 1H 22 profit metrics stated are respectively 'worst case' reductions of 14.8 and 18.84 per cent respectively compared to 1H 22.

On 17 May 2021, APE's share price was $14.58. Yesterday (17 May 2022) it closed at $11.89, which - surprise, surprise - is a decline of 18.45 per cent.

Given this, it's arguable that today's announcement has been fully priced in by 'Mr Market', especially since I've deliberately compared the most pessimistic of APE's projections rather than the upper end, or midpoint, of its forecasts made today for 1H 22.

On the much more positive side, that the order book is at an extremely healthy level bodes extremely well for APE.

In the near term, APE is constrained by the above geopolitical developments, but despite interest rates and inflation rising in Australia, many in its target market are doing OK or better and hence APE is capitalising on that. We need to remember that during COVID-19, collectively, Australians saved something like an excess $250 billion, so that will help when consumers (and businesses) decide whether or not to buy a new (or second hand) vehicle.

Writeoffs introduced by the business-friendly Federal Coalition Government are also a positive.