Quick take: Magni-Tech’s falls after earnings fall below expectations
KUALA LUMPUR: Shares in Magni-Tech Industries Bhd fell over 3% in early trade Tuesday after it posted an 8.31% drop in net profit for its third quarter ended Jan 31, 2020.
The garment manufacturer fell 3.41%, seven sen to RM1.98. It is currently trading at a PE ratio of 8.66 times.
Magni-Tech’s net profit fell 8.31% in the third quarter ended Jan 31, 2020 to RM32.66mil from RM35.62mil a year ago, due to higher operating costs incurred, relative to revenue and negative forex impact.
Quarterly revenue rose marginally by 1.47% to RM313.54mil, from RM308.99mil a year earlier.
It declared a single-tier interim dividend of 2.8 sen per share.
For the nine-month period ended Jan 31, Magni-Tech posted a net profit of RM93.04mil, up 15.09% from RM80.84mil in the same period a year ago.
Revenue for the period increased nearly 12% at RM942.20mil, from RM838.49mil previously.
“Despite accounting for 73% of our full-year estimates, we deem the results to be slightly below our expectations as cumulative nine months earnings would usually account for approximately 78%-80% of Magni’s earnings due to seasonality,” PublicInvest Research said.
The research house has adjusted its FY20-22F estimates downwards by 3%-8% as it expects the fourth quarter to be weaker seasonally and the Covid-19 outbreak affecting the global economy and consumer sentiment.
PublicInvest has revised its SOP-based target price to RM2.80 (RM2.91 previously) and maintained an “outperform” on the counter.
Source: TheStar