Magni: Profits Rose Despite Lower Revenue

Results Update

In QE31/1/2019, Magni's net profit rose 54% q-o-q or 14% y-o-y to RM36 million while revenue was mixed- up 21% q-o-q but down 1.4% y-o-y to RM309 million.

Revenue receded slightly by 1.4% y-o-y due to lower revenue from the garment segment (dropped by 1.1% mainly due to lower sale orders received) and lower revenue for the packaging revenue (dropped by 4.2% mainly due to lower sale orders received). Profit before tax improved by 7.7% y-o-y due to 6.4%-increase in PBT from the Garment segment (mainly due to higher foreign exchange gain by RM2.992 million and lower operating expenses incurred) and 46.4%-increase in PBT from the packaging segment (mainly due to lower operating expenses incurred).

Table: Magni's last 8 quarterly results


Graph: Magni's last 48 quarterly results

Financial Position

As at 31/1/2019, Magni's financial position was very healthy with current ratio at 5.4 times and gearing ratio at only 0.14 time.

Valuation

Magni (closed at RM4.66 yesterday) has a trailing PE of 7.5 times (based on last 4 quarters' EPS of 62.15 sen). At the same time, Magni  paid quarterly dividend which totaled 23 sen; giving the stock a DY of 4.9%. Overall, Magni is still fairly attractive.

Technical Outlook

Magni has been trading sideways for the past 1 years, mostly in a range between RM4.00 and RM5.00. Until a breakout of this range has happened, Magni would remain range bound.


Chart: Magni's weekly chart as at Mar 18, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance and position plus attractive valuation, Magni is a good stock to consider for long-term investment.

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.