Magni: Earning affected by higher expenses

Results Update

For QE31/7/2015, Magni's net profit dropped 6% q-o-q but rose 54% y-o-y to RM15.6 million while revenue rose 10% q-o-q & 9% y-o-y to RM193 million. Revenue rose q-o-q mainly due to higher sale orders received from both garment and packaging businesses. PBT for the current quarter decrease mainly due to higher operating expenses.

Table: Magni's last 8 quarterly results


Chart 1: Magni's last 26 quarterly results

Valuation

Magni (trading at RM4.58 last Friday) has a trailing PE of 8.6 times (based on last 4 quarters' EPS of 53 sen). At this PER, Magni's valuation is still attractive. It may command a PER of 10 times.

Technical Outlook

Magni is in an upward channel with support at RM3.40 & resistance at RM4.80.


Chart 2: Magni's weekly chart as at Sept 11, 2015 (Source: ShareInvestor.com)

Conclusion

Despite the dip in its financial performance, Magni is still a good stock for long-term investment based on positive technical outlook and attractive valuation.

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, Magni.