Background
Scientex Bhd ('Sceintx') is involved in two main businesses: property development (mainly, residential and commercial properties), and
manufacturing various
packaging products and materials for automotive industry.
The property segment contributes 28% of revenue but a whopping 66% of pre-tax profit.
Latest Development
Scientx has just announced that it will be acquiring Great
Wall Plastic Industries Bhd and GW Packaging Sdn Bhd to increase its
annual production capacity for cast stretch film from 120,000 tonnes to 154,000
tonnes. For more, go here.
Recent Financial Results
For QE31/7/2012, Scientx's net profit increased by 19% q-o-q or 13% y-o-y to RM23.4 million while revenue was unchanged q-o-q but increased by 10% y-o-y to RM226 million. Both manufacturing & property segments experienced increased revenue but the improved bottom-line came from sales of higher margin products by the property segment.
Table 1: Scientx's last 8 quarterly results
Chart 1: Scientx's last 28 quarterly results
Financial Position
Scientx's financial position is deemed satisfactory. as at 31/7/2012, its current ratio stood at 1.4 times while gearing ratio stood at only 0.1 time. Debtors' collection and Inventory turnover were satisfactory.
Valuation
Scientx (traded at RM2.56 as at 11.30am) has a PE of 6.6 times (based on last 4 quarters' EPS of 39.03 sen). At this PE multiple, Scientx is deemed inexpensive.
Technical Outlook
Scientx is in an intermediate uptrend line, with support at RM2.35. If it can break above the 'horizontal' line at RM2.60, the stock may continue with its prior uptrend.
Chart 2: Scientx's weekly chart as at Oct 4, 2012_11.00am (Source: Quickcharts)
Conclusion
Based on good financial performance & position, inexpensive valuation and positive technical outlook, Scientx could be a good stock for long-term investment.
Note:
In
addition to the disclaimer in the preamble to my blog, I hereby confirm
that I do not have any relevant interest in, or any interest in
the acquisition or disposal of, Scientx.
2 comments:
Hi Alex,
How you see 3A?
Thanks
Hi Cheer,
3A has broken above its horizontal line of RM1.10 & long-term downtrend line at RM1.15. If it can hold above the RM1.15 and recruit more buying interest, the stock could begin its recovery. Next resistance at horizontal lines of RM1.25 & RM1.40.
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