In QE30/4/2018, SCGM's net profit plunged 97% q-o-q and y-o-y to RM150k while revenue dropped 10% q-o-q or 9% y-o-y to RM48 million. Revenue dropped q-o-q mainly due to lower sales from local and overseas customers which was affected by holidays during the current quarter and strengthening of Ringgit Malaysia against major foreign currencies. PBT dropped sharply q-o-q mainly due to higher resin prices, higher finance costs, higher depreciation charges, higher labour cost and foreign exchange losses incurred during the current quarter.
Table: SCGM's last 8 quarterly results
Graph: SCGM's last 37 quarterly results
SCGM (closed at RM1.81 last Friday) is now trading at a PE of 19X (based on last 4 quarters' EPS of 9.46 sen). Share price will have to go lower to reflect the plummeting earning.
SCGM broke its long-term uptrend line, SS with support at RM2.90 in October 2017.
Chart 1: SCGM's monthly chart as at Jun 22, 2018 (Source: Shareinvestor.com)
In the past 3 months, SCGM has rallied to test its downtrend line, RR. With this exceedingly poor financial performance, a breakout of thsi downtrend line is unlikely to happen next few months.
Chart 2: SCGM's daily chart as at Jun 22, 2018 (Source: Shareinvestor.com)
Based on poor financial performance & bearish technical outlook, SCGM is rated a SELL.
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