Scientex continues to face headwinds

PETALING JAYA: Scientex Bhd is anticipated to proceed to face headwinds when it comes to excessive uncooked materials costs after reporting quarterly outcomes that had been closely impacted by prices.

The plastic packaging producer and property developer additionally has a decrease property launch goal for its monetary 12 months 2022 (FY22), which is a setback, in response to RHB Analysis.

Nevertheless, the analysis home expects an improved efficiency from the property phase.

“In H1FY22, a complete of RM410mil price of properties was launched in Penang, Melaka, and Johor. The group is focusing on 24 extra launches in H2FY22,” the analysis home stated in a report.

Scientex posted a 16.5% drop in web revenue to RM93.69mil for the second quarter ended Jan 31, from RM112.17mil a 12 months earlier, dragged down by rising materials costs and freight prices.

Nevertheless, the group recorded a 5% soar in income to RM952mil in contrast with RM906.55mil beforehand, because of increased demand for plastic packaging merchandise.

Regardless of the commendable high line development, Scientex reported Q2FY22 outcomes had been under consensus expectations because of elevated prices of uncooked supplies and freight which impacted earnings, in response to RHB Analysis.

Nonetheless, “within the midst of the powerful working panorama, its risk-reward profile has managed to show favorable following a 20% de-rating in latest weeks,” it stated.

The analysis home has, therefore, upgraded Scientex’s inventory to a “purchase” from “impartial”.

On its plastics phase, it famous {that a} new stretch movie plant was coming on-line within the second half of this 12 months.

“Scientex’s new robotics stretch movie plant – the primary of its sort in Asia – will start operations in a couple of months with a capital expenditure of RM80mil.

“The plant will initially be put in with two absolutely automated manufacturing strains which ought to enhance the group’s manufacturing effectivity, productiveness, and add an industrial stretch movie capability of 1,500 tonnes/month,” it stated.

“We modify our FY22-FY24 earnings by minus 10%, minus 8%, and minus 3% to account for the excessive uncooked materials costs that ought to stay elevated for the 12 months, and the decrease property launch goal,” RHB added.

Scientex stated it anticipated international financial situations to stay difficult in view of the continued geopolitical tensions.

“Potential draw back dangers resembling rising Omicron infections or the invention of latest pandemic variants, provide chain disruptions and rising international power costs are further elements which may derail international financial restoration,” it added.

In its report on the corporate, Kenanga Analysis additionally stated it was lowering Scientex’s FY22 core web revenue by 4% because of increased uncooked materials and logistics prices limitations.


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