PADINI (7052) : JF Apex Securities downgrades Padini to Hold, cuts target price to RM1.80
KUALA LUMPUR (Nov 27): JF Apex Securities Research had downgraded Padini Holdings Bhd to Hold (from Buy) with a lower target price of RM1.80 (from RM2.22) and said Padini’s quarterly earnings rose 40.9% from previous quarter while fell 30.6% from a year ago.
Meanwhile, it said the revenue of RM226.7 million had risen by 15.7% quarter-on-quarter (q-o-q) and 4.4% year-on-year (y-o-y).
JF Apex Research said Padini’s net profit in 1QFY15 was below expectations by meeting only 18% of house and consensus full year estimates as the company had been impacted by rising operating costs and narrower margin as a result of promotional activities.
“We are slashing our earnings forecast for FY15F and FY16F by 16% and 8% respectively following the disappointing earnings.
“Despite liking the Group’s strategy of building strong presence in market of value-for-money items that made it less affected by tepid consumer sentiment amid switching of consumer preference to value-for-money goods, the Group however is suffering from the setback of rising operating costs and narrower margin.
“Hence, we are turning cautious on the near-term outlook for the Group and see limited catalyst to the Group at the moment,” it said.
http://www.theedgemarkets.com
KUALA LUMPUR (Nov 27): JF Apex Securities Research had downgraded Padini Holdings Bhd to Hold (from Buy) with a lower target price of RM1.80 (from RM2.22) and said Padini’s quarterly earnings rose 40.9% from previous quarter while fell 30.6% from a year ago.
Meanwhile, it said the revenue of RM226.7 million had risen by 15.7% quarter-on-quarter (q-o-q) and 4.4% year-on-year (y-o-y).
JF Apex Research said Padini’s net profit in 1QFY15 was below expectations by meeting only 18% of house and consensus full year estimates as the company had been impacted by rising operating costs and narrower margin as a result of promotional activities.
“We are slashing our earnings forecast for FY15F and FY16F by 16% and 8% respectively following the disappointing earnings.
“Despite liking the Group’s strategy of building strong presence in market of value-for-money items that made it less affected by tepid consumer sentiment amid switching of consumer preference to value-for-money goods, the Group however is suffering from the setback of rising operating costs and narrower margin.
“Hence, we are turning cautious on the near-term outlook for the Group and see limited catalyst to the Group at the moment,” it said.
http://www.theedgemarkets.com
