Scientex Inc Bhd ("Scientex") is involved in the manufacture of pvc & pu leather sheeting; trading in building materials & textile products as well as investment holdings. One of its main subsidiaries is Scientex Packaging (a 61.37%-owned subsidiary), which is involved in the manufacture of stretch film; pp & pe woven bags & fabrics bags; flexible intermediate bulk containers as well as corrugated carton boxes.
Recent Financial Results
Scientx's financial performance continued to improve. For QE31/1/2007, its net profit increased by 31.2% q-o-q or 63.0% y-o-y to RM10.8 million. Its turnover has grown by 0.9% q-o-q or 7.6% y-o-y to RM 158 million.
When comparing its performance for the last 4 quarters with the preceding 4 quarters, we can see that its net profit has increased by 33.2% from RM25.7 million to RM34.2 million while its turnover has increased by 8.5% from RM561 million to RM609 million.
Valuation
Based on the past 4 quarters' EPS of 53.5 sen & its closing price of RM4.16 at the end of today (March 20)'s trading, Scientx is now trading at a PE of 7.8 times. I would consider this PE multiple to be inexpensive for a growth stock like Scientx.
Technical Outlook
Scientx has been consolidating for the past 2 months after making a high of RM4.78 in early February. If the stock can surpass the resistance of RM4.28/30 (marked in pink), it could be completing an inverse head-&-shoulder formation (see the chart below).
You may recall that I've called a BUY on Scientx (here) in October last year when it was poised to break above its then-prevailing resistance of RM3.00 (marked in blue).
Chart: Scientx's daily chart as at March 20
Conclusion
Based on steady growth, inexpensive valuation & potential bullish breakout (above the RM4.30 level), Scientx is a good stock to watch & to invest in.
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