Scientx: Earnings Grew Due to Contribution from Newly-Acquired Daibochi

Result Update

For QE30/4/2019, Scientx's net profit dropped 1% q-o-q but rose 19% y-o-y to RM73 million while revenue was rose 8% q-o-q or 38% y-o-y to RM828 million. The Group’s revenue rose q-o-q mainly due to contribution from the newly acquired subsidiary, Daibochi. Profit before tax for the current financial quarter was RM101.4 million, a marginal increase of 1.4% compared to RM100.0 million recorded in the preceding financial quarter.


Table: Scientex's last 8 quarterly results


Graph: Scientex's last 53 quarterly results

Financial Position

As at 30/4/2019, Scientex's financial position is deemed satisfactory with current ratio at 1.2 times and gearing ratio at 0.72 time.

Valuation

Scientex (closed at RM8.56 yesterday) is now trading at a trailing PE of 14.7 times (based on last 4 quarters' EPS of 58.43 sen). At this PER, Scientex is deemed fairly attractive.

Technical Outlook

Scientx was in an uptrend line, SS which accelerated in a steep uptrend lien, S1-S1 in 2016 & 2017. The share price then broke this steep uptrend line, S1-S1 and tentatively established a more gradual uptrend line, S1-test the uptrend line, S1-S2 at RM7.50.


Chart 1: Scientex's weekly chart as at Jun 26, 2019 (Source: Malaysiastock.biz)


Chart 2: Scientex's monthly chart as at Jun 26, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance, strong financial position, fairly attractive valuation and mildly positive technical outlook, Scientex remains a good stock for medium to 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.