Scientx: Earnings Picked Up

Result Update

For QE31/7/2018, Scientx's net profit rose 44% q-o-q or 22% y-o-y to RM88 million while revenue was rose 22% q-o-q or 13% y-o-y to RM733 million. Profit before taxation rose 39% q-o-q due to better sales performance from both the manufacturing and property divisions as well as contribution from Klang Hock Plastic Industries Sdn Bhd (KHPI). From the date of acquisition (on 2 May 2018), KHPI has contributed approximately RM96,622,000 of revenue and net profit of RM5,685,000 to the Group.


Table: Scientex's last 8 quarterly results

It is encouraging that Scientx achieved a new high in term of PBT and revenue in the last quarter.


Graph: Scientex's last 52 quarterly results

Financial Position

As at 31/7/2018, Scientex's financial position is deemed satisfactory with current ratio at 1.1 times and gearing ratio at 0.83 time.

Valuation

Scientex (closed at RM8.57 yesterday) is now trading at a trailing PE of 14.4 times (based on last 4 quarters' EPS of 59.58 sen). At this PER, Scientex is deemed fairly attractive.

Technical Outlook

Scientx has broken above its intermediate downtrend line, RR at RM8.25 in August 2018. Despite the upside breakout, the share price refused to launch into an upleg. With the new high for revenue and profits, Scinetex may finally continue its uptrend again. We will have to wait and see.


Chart: Scientex's daily chart as at Sep 20, 2018 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance, fairly attractive valuation and mildly positive technical outlook, Scientex remains a good stock for medium to long-term investment. The new high for revenue and profits may be the catalyst for continuation of its prior uptrend.

Note:
I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.