PublicInvest maintains outperform on Magni-Tech on undemanding valuation

KUALA LUMPUR: PublicInvest Research said Magni-Tech Industries Bhd's 4QFY18 revenue and core net profit met its and consensus expectations.

The research house said the company had a weak-performing FY18 with revenue and core net profit declining 5.3% and 11.1% on year respectively due to lower sales orders, higher operating expenses and unfavourable foreign exchange movements. 

"Garment revenue, the Group’s largest contributor, slipped by 28.0% YoY in 4QFY18 due to lower sale orders received and unfavourable foreign exchange movements (Average USD/MYR: -11.9% YoY in 4QFY18). 

"Meanwhile, packaging revenue was lower by 11.6% YoY in 4QFY18 due to the cessation of offset printing packaging business in 4QFY17."

PublicInvest said it expects a better performance in FY19 due to new capacities from two new manufacturing facilities and a more stabile foreign exchange movement.

It maintained its outperform call on Magni-Tech with an unchanged target price of RM6.40 for its undemanding valuation, solid fundamentals and aggractive dividend yield.