Quick take: Scientex shares up 2.1% after results beat estimates

KUALA LUMPUR: Scientex Bhd reported a surprisingly strong set of results in the financial year ended July 31,2019 (FY19), pushing the stock up by 2.14% in early trade Friday.

The packaging manufacturer and property developer rose 2.14%, or 19 sen to RM9.08 in thin trading with 188,800 shares exchanged hands.

Scientex’s net profit jumped 60.9% to RM133.4mil in the fourth quarter ended July 31 from RM82.98mil, marking the first time the group’s quarterly net profit has exceeded the RM100mil mark.

Its revenue for the period rose 30.2% to RM938.76mil against RM720.7mil a year ago.

Scientex has proposed a final dividend of 10 sen per share in respect of FY19, which will be tabled for shareholders’ approval at the upcoming AGM.

For the full-year period, Scientex posted a net profit of RM333.7mil, up 17.3% from RM284.51mil with revenue rose 24.8% to RM3.25bil from RM2.6bil a year ago.

Kenanga Research said Scientex’s FY19 core earnings of RM331.2mil came in above the house (119%) and consensus (108%) estimates on stronger-than-expected property, and plastic margins on improving product mix.

“Topline came in within expectations at 98%, but the deviation from our estimate was from higher-than-expected EBIT margin of 14% (vs. our expectations of 11.4%) from both segments; (i) property segment margins (32% vs. ours of 30%), and (ii) plastic manufacturing segment margins of 7.4% (vs. ours of 6.0%), ” it said.

Kenanga said the final dividend of 10.0 sen, brought FY19 NDPS to 20.0, below its expectation at 91%.

“All in, we increase FY20E earnings by 16% to RM386mil, and introduce FY21E core net profit of RM474mil on improved margins closer to current levels, ” it said.

The research house has maintained its “market perform” on the counter with a higher target price of RM9.45 from RM8.15 previously.

Source: TheStar