Scientx: Earnings Dipped Sequentially

Result Update

For QE31/10/2019, Scientx's net profit rose 51% y-o-y to RM81 million on the back of a 23%-increase in revenue to RM877 million. When compared to the immediate preceding quarter, QE31/7/2019, net profit dropped 39% while revenue was down 7%.  The q-o-q decrease in revenue was mainly due to lower progress billings recognized for the property division. In line with the lower revenue recognized in current financial quarter, profit before taxation for the current financial quarter was RM116 million compared to the preceding financial quarter of RM177 million.


Table: Scientex's last 8 quarterly results


Graph: Scientex's last 57 quarterly results

Financial Position

As at 31/10/2019, Scientex's financial position is deemed satisfactory with current ratio at 1.2 times and gearing ratio at 0.7 time.

Valuation

Scientex (closed at RM9.53 today) is now trading at a trailing PE of 13.4 times (based on last 4 quarters' EPS of 70.99 sen). At this PER, Scientex is deemed fairly attractive.

Technical Outlook

Scientx is in an uptrend which has been capped by the horizontal line at RM9.40-9.50. If Scientx cannot charge above this resistance, its uptrend will continue.


Chart: Scientex's monthly chart as at Dec 17, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on good financial performance, strong financial position, fairly attractive valuation and 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.