Thursday, June 27, 2013

Scientx- boosted by GW Plastics's contribution

Result Update

For QE30/4/2013, Scientx's net profit increased by 15% q-o-q or 50% y-o-y to RM30 million while revenue increased by 27% q-o-q or 52% y-o-y to RM345 million. The improvement performance was attributed to both its Manufacturing & Property divisions but the former  had contributed more due to the completion of the acquisition of GE Plastics in January 2013. This has caused a surge in the Manufacturing division's revenue to RM275 million from RM167 million recorded in the same quarter last year and the operating profit to jump from RM9 million to RM17 million. At the same time, the Property division's revenue also increased from RM60 million to RM70 million and its operating profit increased from RM17 million to RM23 million.

Table 1: Scientx's last 8 quarterly results

Chart 1: Scientx's last 31 quarterly results


Scientx (closed at RM5.24 yesterday) is now trading at a current PE of 9.7 times (based on annualized EPS of 54 sen). At this PE, Scientx is deemed fairly attractive.

Technical Outlook

Scientx is in an uptrend which has picked up pace due to the acquisition of GW Plastics. The result from that acquisition may have been priced into the stock. If so, the share price may move sideway for a while before the next price direction kicks in.

Chart 2: Scientx's weekly chart as at June 26, 2013 (Source: Tradesignum)


Based on good financial performance, still attractive valuation and positive technical outlook, Scientx remains a good stock for long-term investment.

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.

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