Share Price as at December 13, 2010: RM1.83
Distribution for FY2010 9 sen (performance-based dividend policy)
Dividend Yield (%) 4.91%
Trailing 12-m P/E 6.54x
Average Historical P/E (2005 to present) 6.56x
Historical range of P/E (2005 to present) 3.91x - 9.33x
52 week High RM1.96
52 week Low RM1.26
Average Historical P/Book (2005 to present) 1.17
Historical range of P/Book (2005 to present) 0.69 – 1.91
Board of Directors
• Tan Sri Dato’ Mohd Sheriff bin Mohd Kassim Chairman & Ind. Non-Executive Director
(He also sits on the Board of PLUS, PROPEL, Standard Chartered, MANULFE and Yayasan UEM.)
• Lim Teck Meng Executive Deputy Chairman
• Lim Peng Jin MD
• Lim Peng Cheong Non-Ind. Non- Executive Director
• Fok Chuan Meng Non-Ind. Non- Executive Director
• Wong Mook Weng Ind. Non-Executive Director
• Cham Chean Fong Ind. Non-Executive Director
• Dato’ Hazimah Binti Zainuddin Ind. Non-Executive Director
• Teow Her Kok Ind. Non-Executive Director
Corporate Structure
(Source: company's website)
Snapshot
• Scientex was incorporated in Malaysia under the Companies Act, 1965 as Scientific Textiles Industries Sdn. Bhd. to manufacture and market polyvinylchloride (PVC) leather cloth and sheetings.
• Scientex was listed on the Main Market in 1990.
• Scientex has a market capitalisation of more than MYR400 million and a total combined assets of approximately MYR600 million. For the financial year ended 2010, Scientex achieved a revenue exceeding MYR650 million.
• Core businesses are manufacturing and property development.
• Its manufacturing division comprises of two business units namely packaging and polymer.
• The packaging business unit produces various packaging products designed for outer, middle and inner packaging applications:-
• Outer packaging – stretch film, stretch hood, PP strapping band and HDPE tying tape.
• Middle packaging – woven bags, bulk bags (FIBC) and corrugated carton boxss.
• Inner packaging – adhesives, lamination film and PVC rigid film.
(Source: company's website)
Awards
ISO 9001 : 2000
• 1997 --Woventex Sdn Bhd
• 2002 --Scientex Packaging Film Sdn Bhd
• 2005 --Cosmo Scientex (M) Sdn Bhd
• 2007 --Scientex Containers Sdn Bhd
• 2008 --Pan Pacific Straptex Sdn Bhd
ISO 14001 : 2004
• 2005 --Scientex Packaging Film Sdn Bhd
• 2007 --Scientex Containers Sdn Bhd
• 2007 --Cosmo Scientex (M) Sdn Bhd
ISO TS 16949 : 2002
• 2008 --Scientex Polymer Sdn Bhd
ISO 9001:2008
• 2009 --K.C. Contract Sdn Bhd
Operational Highlights as at July 2010
Manufacturing
Scientex Packaging Film S/B – 100k MT p.a
Pan Pacific Straptex S/B – 16.2k MT p.a
Scientex Tsukasa (Vietnam) Co. Ltd – 3.6k MT p.a
Scientex Indusries Group S/B – 4.8k MT p.a
Property
Kulai - Landbank of 250 acres which located within the Secondary Promotion area of Iskandar Malaysia. It comprises 4,000 units of mixed development properties.
Pasir Gudang – Landbank of 1,100 acres which located within the East Growth Corridor of Iskandar Malaysia. It comprises 12,000 residential and 520 commercial properties when fully completed. Up-to-date, more than 5,000 residential and 143 commercial and industrial units completed.
Skudai - Landbank of 146 acres which located within the Primary development area of Iskandar Malaysia. It comprises 1,995 units of mixed development of properties.
Taman Muzaffar Heights - Landbank of 170 acres which located in Air Keroh.
Historical Financial Highlights
• Compounded Annual Growth Return over the past 10 years is 15.24%
• Turnover overall increased 36% in FYE2010 from FYE2009.
• Manufacturing division increased by 27% and Property development division increased by 84%.
• Geographically, the company seems to have changed its strategy. Instead of focusing only on Malaysia, it has managed to increase the revenue largely from Japan and also has expanded to other markets such as Australia. The revenue breakdown for FYE2010 were Malaysia 38.8%, Japan 38.3%, Australia 7.4%, Indonesia 4.4%, Vietnam 0.2% and others 10.9%.
• Net income margin is on an upward trend. For FYE2010, it has improved from 7.35% to 8.68%.
• ROE improved from 9.99% to 14.56%.
• EPS surged 65% from FYE2009 17 sen to FYE2010 28 sen.
• Free cash flow remains healthy.
Keys:
• Revenue up, Net Income up, Net income margin up, ROE up, EPS up, CFO up (since FYE2007), retained earnings up (since FYE2007). What do all these info infer about?
Technical Configuration - lagging
• Descending triangle, awaiting for either bullish or bearish breakout
• Indicators are mixed – hard to determine the next move.
• Illiquid, hard to trade
• Intermediate trend - upward trend
My view
SCIENTEX’s trailing 12-m P/E (6.54x) has reached the average figure (6.56x). Book value per share is 1.95.
Close | BV per share | P/E | Div. Yield | |
BPPLAS | 0.80 | 0.73 | 6.62 | 5 |
DAIBOCI | 2.42 | 1.65 | 8.04 | 6 |
BRIGHT | 0.29 | 0.46 | 10.89 | 0 |
Compared with its peers, the company seems to be undervalued.
Daiboci has higher share price but lower book value per share but it is trading at 8.04x P/E.
Although BPPLAS and BRIGHT have lower share price and book value per share, they are trading at higher P/E, which are at 6.62x and 10.89x respectively.
As such, I think SCIENTEX should deserve higher P/E as well. The average P/E among the 3 peers is 8.52x.
If the company trades at 8.52x, it should worth RM2.38, representing 30% increase.
If the company trades at 7.67x (10% discount), it should worth RM2.14, representing 17% increase.
If the company trades at 6.82x (20% discount), it should worth RM1.91, representing 4.4% increase.
Discount should be applied as the counter has low volume and our observation of lagging share price.
Suggestion: plz follow the Upcoming 1st Quarter result for year 2011.
Disclaimer: The company analysis that appear in this blog is merely facts gathered from different sources and the author's personal view. It is not a buy or sell recommendation. The author do not guarantee the accuracy of the facts being presented. Please consult your investment advisors before acting on any information provided by the analysis above.
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