Group revenue decreased by 26% q-o-q due to 28%-decline in garment revenue mainly due to lower sale orders received and unfavorable foreign exchange movements; 12%-drop in packaging revenue mainly due to the cessation of offset printing packaging (OPP) business in Q4-FYR 2017; and 3%-dip in revenue of the continuing packaging operations (comprising flexible plastic and corrugated packaging) due to lower sale orders received.
PBT decreased by 50.3% q-o-q due to 51%-drop in garment PBT mainly due to lower revenue, higher foreign exchange loss (by RM3.082 million) and higher operating expenses to revenue ratio; 42%-drop in Packaging PBT mainly due to lower revenue in Q4-FYR 2018; and reversal of provision for OPP business closure costs (RM0.307 million) in Q4-FYR 2017.
Table: Magni's last 8 quarterly results
Graph: Magni's last 45 quarterly results
Magni (closed at RM5.10 last Friday) has a trailing PE of 9 times (based on last 4 quarters' EPS of 56.15 sen). Albeit the dividend cut, Magni still pays quarterly dividend which totaled 20 sen in the past 4 quarters; giving the stock a DY of 3.9%. Overall, Magni is still fairly valued.
Magni could have broken its long-term uptrend.
Chart 1: Magni's monthly chart as at June 22, 2018 (Source: ShareInvestor.com)
However, Magni has recently broken above its intermediate downtrend line, RR. Magni's immediate support will be at RM4.60-4.70.
Chart 2: Magni's weekly chart as at June 22, 2018 (Source: ShareInvestor.com)
Despite the weaker earnings and bearish technical outlook, I would rate Magni a HOLD to reflect a temporary pause in performance of an outstanding stock.
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