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Thursday, June 29, 2017

Magni: Earnings Continued To Rise

Results Update

For QE30/4/2017, Magni's net profit rose 30% q-o-q or 104% y-o-y to RM38 million while revenue rose 3.6% q-o-q or 54% y-o-y to RM299 million. Group revenue increased by 3.6% q-o-q due to 4.8% increase in Garment revenue (resulting from favourable foreign exchange movements and higher sale orders received) and 5.6%-decline in Packaging revenue (mainly due to the closure of SIPP's business in Q4-FYR 2017). Group PBT increased by 13.7% due to 4.3%-increase in Garment PBT (mainly due to higher revenue and lower foreign exchange loss) and 278.7%-increase in Packaging PBT (which was due to the reversal of SIPP's staff benefits and business closure costs totaling RM0.491 million in Q4-2017, and the absence of provision of SIPP's closure costs of RM2.877 million in Q3-FYR 2017). Stripping of these provision & reversal, packaging PBT for Q4-2017 increased by 11.9% versus Q3-FYR 2017 mainly due to higher other operating income.

Table: Magni's last 8 quarterly results


Graph: Magni's last 33 quarterly results

Valuation

Magni (trading at RM7.41 as at 10:20am) has a trailing PE of 10 times (based on last 4 quarters' EPS of 73.8 sen). Its last 3 years' earning CAGR was at 65%; 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.


Chart: Magni's monthly chart as at Jun 29, 2017_10.00 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance, attractive valuation and bullish technical outlook, Magni remains a very good stock for long-term investment. 

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.Results Update


For QE31/1/2017, Magni's net profit rose 3.6% q-o-q or 13.4% y-o-y to RM29.6 million while revenue rose 3.3% q-o-q or 7.5% y-o-y to RM289 million. Revenue increased q-o-q due to 3.7%-increase in Garment revenue as a result of favorable foreign exchange rate but was partially weighed down by lower sale orders received and 0.4%-increase in Packaging revenue as a result of higher sale orders received. PBT increased q-o-q due to higher PBT for Garment PBT of 14.2% mainly due to higher revenue and higher foreign exchange gain (Other operating income) which was partially offset by a 158.5%-drop in packaging PBT mainly due to the provision of SIPP's closure costs of RM2.877 million. Had there been no provision for the closure costs, packaging PBT would have been higher by 18.6% versus the preceding quarter mainly due to better productivity, aided by a slight increase in revenue.

Table: Magni's last 8 quarterly results


Graph: Magni's last 32 quarterly results

Valuation

Magni (trading at RM5.16 yesterday) has a trailing PE of 8.4 times (based on last 4 quarters' EPS of 61.73 sen). Its last 2 years' earning CAGR was at 50%; 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. The stock broke above the January 2016 high of RM4.60; signaling the continuation of the long-term uptrend.


Chart 1: Magni's monthly chart as at Mar 16, 2017 (Source: ShareInvestor.com)


Chart 2: Magni's weekly chart as at Mar 16, 2017 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance, attractive valuation and bullish technical outlook, Magni remains a very good stock for long-term investment. 

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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