SCGM Bhd (+ve)
SCGM (Fundamental: 3/3, Valuation: 1.7/3) — one of InsiderAsia’s Top 10 picks for 2015 — saw renewed investor interest lately, likely due to expectation of better earnings results for 4QFYApr2015, which is due by end-June. The stock closed at an all-time high of RM3.21 yesterday, up a whopping 72.6% year-to-date.
For 9MFY2015, sales increased 5.6% y-o-y to RM80.8 million while net profit rose 15.6% to RM10.4 million, thanks to lower raw material costs, foreign exchange gains and economies of scale.
Based in Kulaijaya, Johor, SCGM is a leading manufacturer of thermo-vacuum formed plastic packaging — mainly disposable plastic trays and containers — with an estimated 70% market share in Malaysia. Export currently accounts for about 45% of total sales, denominated mostly in SGD and USD.
The stock trades at a trailing 12-month P/E of 19.7 times and 3.35 times book. Dividends totalled 9 sen per share for 9MFY2015. Investors can expect a final dividend payment for 4QFY2015.
This article first appeared in The Edge Financial Daily, on June 17, 2015.