PADINI (7052) - PADINI Updates – 11 Nov 2017 - L. C. Chong

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PADINI Analysis File – https://lcchong.files.wordpress.com/2017/11/padini-fy17-q4.xlsx
For growth drivers and risks, you can refer to MD&A (Management Discussion and Analysis) in their Annual Report 2017. As I agree with their disclosure, so I have no further comment.
My main concern is their increase in cost of sales due to the increase of inventories written off, inventories written down and inventory losses (collectively known as inventories losses) of approximately RM32 million. This is an initiative to embark on a more stringent inventory policy with the use of stricter write off/down estimates. I wonder how this policy impact PADINI’s gross margin in the future. This is a question need to be asked in their coming AGM, but I won’t be able to attend the AGM. Hopefully, someone can ask and share their response with me.
At RM5.10 (9 Nov 2017), in my opinion, PADINI almost fully valued where range of its fair value is from RM4.5 to RM 5.5. I will continue to hold and won’t accumulate PADINI for the time being.
Join my FB group: https://www.facebook.com/groups/285121298359919 for more collaboration.

https://lcchong.wordpress.com/2017/11/10/padini-updates-11-nov-2017/



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