This article first appeared in The Edge Financial Daily, on March 17, 2016.

Scientex Bhd (+ve)

SHARES of Scientex (fundemental: 1.7/3; valuation: 1.5/3) was up by 4 sen or 0.36% to close at RM11.24 on the back of heavy trading of 1.24 million shares compared to its 200-days average volume of 173,558 despite the lack of any new announcement. Since the end of last year, the share price has risen by 16.8%.

For the first quarter of the financial year ended 31 October 2015 (1QFY16), the group’s net profit more than doubled to RM60.85 million from RM30.27 million in the corresponding period a year ago. Its revenue also registered an increase of 27.73% to RM550.6 million from the RM431.07 million reported in 1QFY15.

In its manufacturing segment, the improved performance was attributed to the higher contribution from the industrial and consumer packaging products, as well as the contribution from the newly acquired Scientex GreatWall Ipoh Sdn Bhd (SGW Ipoh). Better profit margins and contribution from SGW also helped to improve profit for the manufacturing segment.

Its property segment also recorded an improve revenue of 43.14% to RM158.6 million from RM110.8 million in the preceding corresponding quarter, attributed mainly to progress sales recognition from the completion of The Garden Residences development in Pasir Gudang, Kulai, Senai and Malacca.

On its current financial year prospect, the group said “the recent acquisition of SGW Ipoh has started to produce results as its revenues and profits contribute positively to the top and bottom lines of the Group’s post acquisition.”

For the property segment, it will continue to remain focused on affordable homes in its projects after the successful launch of this category of properties in Pasir Gudang, Johor, in May 2015.

The stock is currently trading at a trailing P/E of 13.42 times and is 2.51 times its book value, with a market capitalisation of RM2.55 billion.