Tuesday, July 01, 2014

Magni: Bottom-line dropped q-o-q due to lower sales!

Results Update
For QE30/4/2014, Magni's net profit dropped 43% q-o-q but rose 17% y-o-y to RM8.5 million while revenue dropped 13% q-o-q but rose 19% y-o-y to RM162 million. The q-o-q decline in revenue was attributable to lower sales orders received from garment business. This has caused a drop in the bottom-line for the company.

Table: Magni's last 8 quarterly results

Chart 1: Magni's last 21 quarterly results


Magni (trading at RM3.16 as at 3.45pm) has a trailing PE of 8.2 times (based on last 4 quarters' EPS of 38.7 sen). At this PE, Magni's valuation is still undemanding. It may command a PE of 9-10 times.

Technical Outlook

Magni is in a gradual uptrend line. Its immediate support is at the 40-week EMA line at RM2.50. That would be a good entry level for the stock.

Chart 2: Magni's weekly chart as at Jun 27, 2014 (Source: Tradesignum)


Despite the weaker financial performance, Magni is still a good stock for long-term investment in view of its attractive valuation & good technical outlook.

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, Magni.


Big Sea said...

Historically Q3 is always the strongest quarter for MAGNI, so perhaps not too fair to say that sales is weak.

Over the past 4 years, Q4 revenue is always about 83% - 88% of Q3 revenue. Therefore latest Q4 revenue is actually within expectation.

Alex Lu said...

Hi Big Sea,

I agree. It is shown clearly in the chart for past quarterly results.

That's why I still rate it a HOLD. I was happily surprised that I've called a BUY on this stock sometimes back.