Quick take: Magni-Tech rises 5% on improved earnings

KUALA LUMPUR: Shares in Magni-Tech Industries Bhd edged 5% higher in early trade on Tuesday after the company reported a 14.3% growth in third quarter earnings.

The garment and packaging product manufacturer rose 4.94%, or 23 sen to RM4.89 with 51,200 shares traded.

Magni-Tech Industries Bhd’s third quarter net profit rose 14.39% to RM35.62mil from RM31.14mil a year earlier, mainly on lower operating expenses.

Its quarterly revenue eased 1.37% to RM309mil from RM313.3mil previously on lower sales order received from both the garment and packaging plastic segments.

Magni-Tech declared a third interim dividend of eight sen per share, bringing total dividends for the first three quarters to 18 sen per share.

Magni-Tech’s net profit for the nine-month period rose 12.99% to RM80.84mil from RM71.23mil the year before, mainly thanks to lower operating expenses and higher foreign exchange gains.

Revenue fell 2.43% to RM838.49 million from RM859.33mil.

PublicInvest Research said Magni-Tech’s cumulative nine months core net profit was in line with the house’s expectations, making up 74.9% of its full-year forecast.

“Magni-Tech has recovered strongly from its recent 12-month low of RM3.86. While sitting on a net cash position of RM232.1mil (RM1.43/share) backed by its attractive dividend yield (FY20F: 4.7%) and earnings growth, its investment case continues to be compelling.

“We maintain our Outperform call on Magni-Tech with an unchanged SOP-based target price of RM6.45,” PublicInvest said.

Source : TheStar