Hot Stock Magni-Tech jumps 8.85% on firmer 2Q earnings

by **Cals** Mon 28 Dec 2015, 05:11

Hot Stock

[size=28]Magni-Tech jumps 8.85% on firmer 2Q earnings

By Surin Murugiah / theedgemarkets.com | December 23, 2015 : 9:44 AM MYT

KUALA LUMPUR (Dec 23): Shares of garments and plastic packaging products manufacturer Magni-Tech Industries Bhd ([You must be registered and logged in to see this image.] Valuation: 1.50, Fundamental: 2.40) saw its net profit soar 2.7 times year-on-year (y-o-y) to RM21.63 million in its second quarter ended Oct 31, 2015 (2QFY16) from RM8 million, largely due to the stronger US dollar against the ringgit during the period.

At 9.25am, Magni-Tech rose 37 sen to RM4.55 with 537,300 shares done.

Revenue for the quarter rose 21.8% y-o-y to RM197.34 million from RM162.04 million, its filing to Bursa Malaysia today showed.

The company also declared a single-tier interim dividend of 5 sen per share, along with a special dividend of 3 sen per share for the financial year ending April 30, 2016 (FY16). Both dividends are payable on Jan 26, 2016, and will go ex on Jan 7.

The group said its profit before taxation for the current quarter rose by 165%, mainly due to higher garment revenue and higher other operating income, which was largely contributed by the favourable currency exchange rate.

It highlighted the stronger greenback resulted in a 27.5% increase in the segment's revenue, though that was partly offset by a 2.6% fall in revenue from its packaging business.

For the first half of its financial year (1HFY16), net profit more than doubled y-o-y to RM37.2 million from RM18.09 million, as revenue rose 15% y-o-y to RM391.16 million from RM339.28 million.

Going forward, the company expects its garments business to remain its major revenue contributor, which accounted for about 84.8% of its revenue for the financial period, and expects both its business divisions to remain profitable in the current financial year.

However, it remains cautiously positive for the remainder of FY16, amid the uncertainty in the global economy.
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