Group revenue dropped y-o-y due to 8.7%-decline in Garment revenue due to lower sale orders received and 18.9%-drop in Packaging revenue due to the cessation of offset printing packaging business in Q4-FYR 2017.
Group PBT dropped 28.0% y-o-y due to 26.3%-drop in Garment PBT which mainly due to lower revenue, higher operating expenses and foreign exchange loss. Packaging PBT decreased by 59.1% y-o-y mainly due to higher raw material costs and operating expenses, and lower revenue
As a result of lower profits, Magni cut its dividend to 4.5 sen from 5 sen paid out in the same quarter last year.
Table: Magni's last 8 quarterly results
Graph: Magni's last 43 quarterly results
Magni (closed at RM6.01 yesterday) has a trailing PE of 9 times (based on last 4 quarters' EPS of 66.46 sen). Albeit the dividend cut, Magni still pays quarterly dividend which totaled 21 sen in the past 4 quarters; giving the stock a DY of 3.5%. Overall, Magni is still fairly valued.
Magni is still in a long-term uptrend. That uptrend has accelerated twice fom SS to S1-S1 to S2-S2. The support of S2-S2 is at RM6.00. The next support will be at the uptrend line, S1-S1 at RM5.00. The indicator readings are not encouraging; the MACD line is poised to cross below the MACD signal line, the +DMI is dropping against a rising -DMI, and, lastly, Slow Stochastic has broken its uptrend line. All these indicator readings are warning signs that the RM6.00 support may not hold out for long.
Chart: Magni's monthly chart as at Dec 12, 2017 (Source: ShareInvestor.com)
Despite the poorer earnings and dividend cut, Magni is still a good stock for long-term investment. The good entry level may be between RM5.00 and RM5.50.
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