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Wednesday, December 14, 2016

Magni: Another Outstanding Quarter!

Results Update

For QE31/10/2016, Magni's net profit rose 21% q-o-q or 32% y-o-y to RM28.5 million while revenue rose 3% q-o-q or 42% y-o-y to RM280 million. Revenue increased q-o-q due to higher garment and packaging revenue of 3.4% and 0.6% respectively mainly due to higher orders received. PBT increased q-o-q due to higher PBT for  garment of 23.3% due to higher revenue and lower operating expenses resulting from vigilant cost control but was partially weighed down by lower foreign exchange gain and lower dividend income, which offset lower PBT for packaging PBT mainly due to higher operating expenses.


Table: Magni's last 8 quarterly results


Graph: Magni's last 31 quarterly results

Valuation

Magni (trading at RM4.11 yesterday) has a trailing PE of 6.9 times (based on last 4 quarters' EPS of 59.6 sen). Its last 2 years' earning CAGR was at 53%; giving the stock a PEG ratio of less than 0.2x. At this PEG ratio, Magni's valuation is still very attractive. 

Technical Outlook

Magni is in a long-term uptrend. There are negative technical reading; MACD has just crossed below its MACD signal line and ADX has hooked down. This is reflected in the intermediate downward channel, which has support at RM3.60-3.70 & resistance at RM4.30-4.40.


Chart 1: Magni's monthly chart as at Dec 13, 2016 (Source: ShareInvestor.com)


Chart 2: Magni's weekly chart as at Dec 13, 2016 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance and attractive valuation, Magni remains a very good stock for long-term investment. Its short-term technical weakness warrants close attention but 

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.

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