SCGM (7427) - SCGM BHD:Turnover raise with 2 Sens Dividends
SCGM General Profile
The
Company is one of the largest food packaging producer in Malaysia. The
Group offers one stop solution of packaging needs for all the customers
and industrial. As at 30 April 2016, SCGM able to produce more than 16.9
million tons of extrusion sheets.
Review of Quarter Results
Based
on current quarter results, the Group recorded Revenue of RM45.987
million which higher than previous quarter by RM 8.7 million or 23.4%
Revenue
increase mainly due to high demand of local sales, Plastic Packaging
Products (as highlighted in green). Currently the Group is focusing on
local market due to many states follow the suite on ban of polystyrene.
However,
not hard to observe that Profit was lower than previous quarter even
through Revenue has increased. The reason is increase of cost of
production,raise of resin price, depreciation of property, plant and
equipment, higher consumption of electricity and packaging (raw
material).
Higher
of Production cost was significantly affect profit before tax by 20.7%
Besides, company Gross Profit Margin also drop from 24% to 16%
Dividends
Table shown the dividend paid out for the company with recorded Dividend Yield at 1.9%
The Group start to pay Dividend more frequent since 2014.
Borrowings
We
should take note that company borrowings has increased to RM21.3
million due to purchasing Property, Plant Equipments (as recorded in
previous Quarter Result).
Future Prospects
1. More States going to follow the suite on ban of polystyrene. Thus, demand of substitution for lunch box will increase
2.
Upcoming 2017 SouthEast Asian Games and ASEAN Para Games going to host
in Kuala Lumpur at Aug 17 and Sep 17. It going to increase demand for
disposable lunch box and cups.
3.
Demand for backery, sushi, fruits and vegetables products will increase
demand due to awareness of effect from ban of polystyrene trays and for
more hygienic packaging.
Overall, we still optimize for company future growth due to the strong local sales, and the frequency of Dividend Payout.
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Youngz
SCGM (7427) - SCGM BHD:Turnover raise with 2 Sens Dividends
http://wesharenwetrade.blogspot.my/2017/03/scgm-7427-turnover-raise-with-2-sens.html
