Scientex Financial Analysis

Scientex's performance is very impressive! Profit and net income reached RM1.11 billion and RM131 million, respectively. Compared to the same period last year, Scientex's profit and net income increased by 2.3% and 28.6%, respectively. The growth in profit and net income is mainly attributed to the property division.

In the latest quarter, the revenue of the packaging business was RM635.8mil, a decrease of RM19.3mil compared to the same period last year. The main reason is the weak market consumption, which has led to a weakened demand for the packaging export market. In addition, the performance of the industrial sector is very impressive. The revenue of the industrial business was RM456.9mil, an increase of 41.3% compared to the same period last year. The management also revealed that their affordable houses launched in Sungai Dua (Penang), Sungai Petani (Kedah), Ipoh (Perak), Jasin (Melaka), and Pulai (Johor) have received enthusiastic responses.

The management revealed that the demand in the packaging industry will increase in the next quarter's financial report (expected at the end of June). They are currently committed to reducing operating costs and minimizing production waste to maintain product competitiveness. They will also start installing solar photovoltaic systems and plan to implement them in all local factories in the long term. As for the industrial sector, the management stated that affordable houses have been well-received, and Scientex will continue to seek and acquire competitive land to sustain long-term development. The land in Jenjarom, Terbrau, and Kulai will be acquired by 2024. Scientex believes that its property division will continue to grow, and 50,000 units of affordable houses will be completed by 2028.

Given the challenging situation in the plastic packaging industry, it is not easy for the company to sustain growth. However, it is believed that the packaging industry will gradually improve in the next quarter. The management also believes that affordable houses are of great help to the company's growth.

We can also see that Scientex's margin has increased from 10.9% in the same quarter last year to 12.9% this year. This shows that the margin for affordable houses is quite substantial. Scientex is like a two-headed horse carriage for Sam, with the global interest rate cut in the second half of the year and the recovery of the economy. If Scientex expects the packaging industry to rebound next quarter, along with the growth of real estate, this company will continue to grow and deserves our attention.

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