Scientx: Bottom-line dipped

Result Update

For QE31/10/2014, Scientx's net profit  dropped by 38% q-o-q but rose 3% y-o-y to RM30 million while revenue grew by 4% q-o-q or 18% y-o-y to RM431 million. Pre-tax profit dropped q-o-q due to poorer products mix for both manufacturing & property development divisions plus provision for unrealized forex loss of RM5.0 million.


Table 1: Scientex's last 8 quarterly results


Chart 1: Scientex's last 37 quarterly results

Valuation

Scientex (at RM7.08 last Friday) is now trading at a trailing PE of 10.4 times (based on last 4 quarters' EPS of 68 sen). With strong growth of about 30% last 4 quarters, Scientx is an attractive growth stock with PEG ratio is about 0.3 time only.

Technical Outlook

Scientx has been in an uptrend since breaking above its large triangle (ABC) at RM1.50 in early 2010. Despite the recent selldown, Scientx's uptrend is still intact. The sharp q-o-q drop in bottom-line could lead to short-term weakness in the share price.


Chart 2: Scientex's weekly chart as at Dec 19, 2014 (Source: Tradesignum)

Conclusion

Based on good financial performance, attractive valuation & positive technical outlook, Scientex remains a good stock for medium to long-term investment.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Scientex.