Friday 29 Mar 2024
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KUALA LUMPUR (Dec 13): Shares in Magni-Tech Industries Bhd fell 7.49% this morning, after it said its latest quarterly net profit shrank 28%, hit by lower garment sales and cessation of its offset printing packaging business.

The counter ended the morning session trade at its intra-morning low so far at RM5.56, down 45 sen or 7.49%. As at noon break, some 964,200 shares were exchanged, versus its 200-day average trading volume of 265,788, valuing the company at RM904.79 million. 

Magni-Tech's shares scaled an all-time high at RM7.52 on Aug 3 this year. Year to date, it has appreciated some 36.2%.

Yesterday, Magni-Tech announced a 28% drop in net profit for its second quarter ended Oct 31, 2017 (2QFY18)  to RM20.5 million, from RM28.52 million; while revenue retreated 10% year-on-year to RM252.32 million from RM279.79 million in 2QFY17.

Its offset printing packaging business ceased in 4QFY17.

PublicInvest Research said the result came in within expectation at 38% but was below consensus’ expectation at only 35%. It lowered Magni-Tech’s target price to RM6.40, from RM7.20 previously while reiterating a neutral call on the group.

Its analyst Chua Yi Jing cautioned that Magni-Tech may continue to suffer from persistent margin compression due to minimum wage hike in Vietnam moving forward.

“While we like Magni-Tech for its solid fundamentals (with a net cash position of RM163.2 million as at 2QFY18 vs RM117.9 million as at 2QFY17), we remain cautious on the near term outlook given the continuous hike in minimum wage in Vietnam where the group derives its 95% earnings from,” said Chua in the note released today.

 

 

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