KUALA LUMPUR (Sept 29): At a glance, SCGM Bhd's share trade volume has spiked since yesterday as investors anticipated the announcement on the food packaging products and face mask manufacturer's first quarter financials.

SCGM's financials for the first quarter ended April 30, 2020 (1QFY21) appeared strong after the company reported yesterday that net profit more than tripled from a year earlier and declared a dividend to reward shareholders.

Yesterday, SCGM's share trade volume ended at 16.59 million shares.

Today, SCGM's volume already reached 16.21 million units at Bursa Malaysia's 12:30pm break. SCGM's share price, however, settled down 26 sen or 7.24% at RM3.33, which brings its market value to RM653.09 million.

According to SCGM's Bursa filings yesterday, 1QFY21 net profit surged to RM8.27 million from RM2.2 million a year earlier while revenue rose to RM57.22 million from RM55.66 million.

The company declared a dividend of 1.7 sen a share.

Today, Kenanga Investment Bank Bhd analyst Marie Vaz wrote in a note that SCGM's core net profit (CNP) of RM9.4 million is within Kenanga's expectation at 30% of its RM31.4 million full-year estimate.

In accounting practice, a company's CNP has been adjusted to exclude extraordinary items.

"We increase FY21-22E CNP to RM35.3-42.8 million (by 13-11%) from increased sales of face mask products from two additional machines and better product mix as face mask should be able to command higher margins vs. existing products," said Vaz, who maintained Kenanga's "market perform call" for SCGM shares but increased the stock's target price (TP) to RM3.85 from RM3.45 previously.

Public Investment Bank Bhd analyst Chong Hoe Leong wrote in a note today that SCGM's stronger-than-expected 1QFY21 results made up 36.6% and 30.3% of the investment bank's and street full-year expectations.

"In view of the persistently soft resin prices and new capacity for its face mask production, we raise FY21-FY23 earnings forecasts by 26%-40%. We maintain our 'outperform' call but with a higher TP of RM4.37 based on 25x FY22 EPS as a result of the earnings adjustment," Chong said.