Scientex: Profits boosted by a substantial fair value gain

Result Update

For QE31/7/2015, Scientx's net profit  increased by 14% q-o-q but remained unchanged y-o-y at  RM49 million while revenue was mixed- dropped marginally by 1% q-o-q but rose 9% y-o-y to RM453 million. Net profit rose mainly due to fair value gain of RM12.6 million arising from the revaluation of investment properties and also better margin contributions from the property and manufacturing divisions.


Table 1: Scientex's last 8 quarterly results


Chart 1: Scientex's last 40 quarterly results

Valuation

Scientex (closed at RM7.08 yesterday) is now trading at a trailing PE of 10 times (based on last 4 quarters' EPS of 70.4 sen). At this PER, Scientex is deemed fairly valued.

Technical Outlook

Scientx is in a long-term uptrend line with support at RM6.00. The stock is likely to move sideways in the next few months. The 20-week EMA line will likely to be the support for the stock at RM6.50.


Chart 2: Scientex's monthly chart as at Sep 29, 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.