Scientx: Earnings increased

Result Update

For QE31/1/2015, Scientx's net profit  increased by 19% q-o-q or 6% y-o-y to RM36 million while revenue increased by 7% q-o-q or 21% y-o-y to RM463 million. Revenue increased q-o-q mainly attributed to the property division. Profit before taxation for the current financial quarter under review was RM47.3 million, an increase of 17.8% compared to RM40.2 million recorded in the preceding financial quarter. The increase in profit is consistent with the increase in revenue.


Table 1: Scientex's last 8 quarterly results

Segmental results shows that manufacturing division's operating profit declined due to lower margin (from 5.8% to 5.0%) which more than offset the 12%-increase in revenue. The property division's operating margin also dropped (from 30% to 29%) but the operating profit improved due to 45%-rise in revenue.


Table 2: Scientex's segmental results


Chart 1: Scientex's last 38 quarterly results

Valuation

Scientex (at RM6.62 at the close of the morning session) is now trading at a trailing PE of 9.7 times (based on last 4 quarters' EPS of 68 sen). With strong growth of about 21% in the last 4 quarters, Scientx is an attractive growth stock with PEG ratio is about 0.5 time only.

Technical Outlook

Scientx has been in an uptrend line, SS. Monthly MACD & Slow Stochastic have hooked down due to recent weak sentiment. The stock should find support at the psychological level of RM6.00.


Chart 2: Scientex's weekly chart as at Mar 23, 2015_12.30pm(Source: ShareInvestor.com)

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.