RHB Research ‘neutral’ on Scientex
Scientex Holdings Bhd’s second half of financial year 2024 performance is expected to be better in anticipation of returning demand for consumer packaging as customers stock up on their inventory, said RHB Investment Bank Bhd (RHB Research).
On the property side, the research house is optimistic that Scientex is on track to achieve its property launch of RM2 billion for financial year 2024.
“As such, we continue to expect the property segment to be the main earnings contributor in the coming quarters,” it said in a note.
Scientex’s second quarter of financial year 2024 revenue increased 41 per cent year-on-year amid steady progress billings from ongoing projects and robust demand from new launches.
As a result, RHB Research said Scientex managed to launch RM657 million worth of properties in first half of financial year 2024.
Although this makes up only 33 per cent of financial year 2023 property launches of RM2 billion, the company is optimistic that it will be able to achieve a higher property launch year-on-year on the back of upcoming launches in both the central and southern regions.
“Demand for affordable homes remains healthy, as reflected in the 60 per cent take-up rate for its new launches in first half of financial year 2024. As such, we continue to expect the property segment to be the main earnings
driver in financial year 2024,” it said.
Meanwhile, RHB Research said Scientex’s second quarter of financial year 2023 net profit rose 24 per cent year-on-year to RM132.1 million, bringing first half of financial year 2024’s core earnings to RM270.3 million.
This is in line with the firm’s and consensus estimates, at 49 per cent.
“Regardless, we believe that this stock remains fairly valued, as it is trading at 10.5 times, in line with its historical mean of 11 times. We remain ‘neutral’ on the stock, with a new target price of RM3.85 from RM3.75 previously,” it added.