Stock With Momentum: Magni-Tech Industries

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Magni-Tech Industries Bhd (-ve)

MAGNI-TECH (Fundamental: 2.8/3, Valuation: 2.4/3), an apparels manufacturer and a major supplier to global sportswear leader Nike, jumped 4.1% to an all-time high of RM4.57 yesterday. This came after it announced a strong set of 1QFYApr2016 earnings results as well as a proposed 1-for-2 bonus issue. 

For 1QFY16, net profit surged 54.4% y-o-y to RM15.6 million, mainly due to higher revenue and other operating income, and lower cost of sales in the garment business. Revenue grew 9.4% to RM193.8 million, thanks to increased sale orders from the garment business. 

The stock is trading at a trailing 12-month P/E of 9.1 times and 1.74 times book. In June, the company proposed a final dividend of 3 sen per share and a special dividend of 7 sen per share. The dividends are subject to shareholders’ approval at its forthcoming AGM, expected next month. Dividends totalled 15 sen per share for FY2015, giving a net yield of 3.4%.

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This article first appeared in digitaledge Daily, on September 11, 2015.