SCGM: Earning improved

Results Update
 
For QE31/1/2015, SCGM's net profit rose 27% q-o-q or 17% y-o-y to RM3.8 million while revenue rose 5% q-o-q or 11% y-o-y to RM27 million. Revenue increased q-o-q in line with improved demand from the general Asian and Australian markets. Bottom-line improved due to higher sales, lower raw material costs and foreign exchange gains - as a result of a stronger U.S. dollar.

 
Table: SCGM's last 8 quarterly results

 
Chart 1: SCGM's last 24 quarterly results

Valuation

SCGM (closed at RM2.69 yesterday) is now trading at a PE of 16.6 times (based on last 4 quarters' EPS of 16.18 sen). At this PE, SCGM is fully valued. It is no longer a penny stock trading at RM0.50 in December 2012 with a PE of 5.3 times.

Technical Outlook

SCGM is in a long-term uptrend line with support at RM2.10. Last week, it broke above its recent high of RM2.50.

 
Chart 2: SCGM's weekly chart as at Mar 18, 2015 (Source: ShareInvestor.com)


Chart 3: SCGM's monthly chart as at Mar 18, 2015 (Source: ShareInvestor.com)

Conclusion

Based on good financial performance & positive technical outlook, SCGM is still a good stock for long-term investment. However, its upside may be limited given its current high PER. 

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, SCGM.