Scientex Earnings Analysis

Scientex's performance is impressive! Profit and net profit reached RM1.11bil and RM131mil, respectively. Compared with the same period last year, Scientex's profit and net profit increased by 2.3% and 28.6%, respectively. The increase in earnings and net profit was mainly due to the property division.

The revenue of the packaging business in the latest quarter was RM635.8 mil, down RM19.3 mil from the same period last year. The main reason is that export market demand in the packaging sector has weakened due to weak market consumption. Furthermore, the performance of the industrial sector is impressive. The revenue of the industrial business was RM456.9 mil, an increase of 41.3% over the same period last year. Management also revealed that their affordable houses launched by Sungai Dua (Penang), Sungai Petani (Kedah), Ipoh (Perak), Jasin (Melaka), and Pulai (Johor) have all received enthusiastic responses.

Management revealed that demand in the packaging industry will grow in the packaging business's financial report for the next quarter (expected to end of June). At this stage, they are working to reduce operating costs and production waste to maintain product competitiveness. They will also begin installing solar photovoltaic systems and plan to implement them at all local plants in the long term. As for the industry, management said that affordable houses are favored by everyone, and Scientex will continue to seek and acquire competitive land to maintain long-term development. The land in Jenjarom, Terbrau and Kulai will be acquired in 2024. Scientex believes his Property Division will continue to grow, and the 50k unit affordable house will be completed in 2028.

In such a difficult situation in the plastic packaging industry, it is not easy for the company to continue to grow. However, I think the packaging industry will gradually improve starting next quarter. Management also believes that Affordable House has greatly helped the company grow.

We can also see Scientex's margin increase from 10.9% in the same quarter last year to 12.9% this year. As can be seen from this, the margin for affordable houses is quite impressive. Scientex is like Sam's double wagon. The US cut interest rates globally in the second half of the year, and the economy regained momentum. If Scientx's packaging industry returns next quarter, real estate will grow as well. Then this company will continue to grow and deserve all of our attention.

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