SCGM: Earnings rose due to MYR weakness

Results Update
 
For QE30/4/2015, SCGM's net profit rose 34% q-o-q or 104% y-o-y to RM5.1 million while revenue was mixed- down 5% q-o-q but rose 9% y-o-y - to RM26 million. Revenue dropped q-o-q in line with slight slowdown demand from the general Asian and Australian markets. The big festival like Chinese New Year in February 2015 had boosted sales in the previous quarter to January 2015. Profits rose q-o-q due to foreign exchange gains as a result of a stronger U.S. dollar had an impact on export sales

 
Table: SCGM's last 8 quarterly results

 
Chart 1: SCGM's last 25 quarterly results

Valuation

SCGM (closed at RM3.32 yesterday) is now trading at a PE of 17 times (based on last 4 quarters' EPS of 19.46 sen). At this PE, SCGM is fully valued.

Technical Outlook

SCGM is in a long-term uptrend line. Price weakness has been arrested by the 10-month SMA line, currently at RM2.40-2.50. MACD & Slow Stochastic indicators are still positive.


Chart 2: SCGM's monthly chart as at Jun 17, 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.