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JF Apex Securities maintains Buy on Padini, trims target price

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JF Apex Securities maintains Buy on Padini, trims target price Empty JF Apex Securities maintains Buy on Padini, trims target price

Post by Cals Thu 28 Aug 2014, 18:12

JF Apex Securities maintains Buy on Padini, trims target price
Business & Markets 2014
Written by theedgemalaysia.com   
Thursday, 28 August 2014 08:36

KUALA LUMPUR (Aug 28): JF Apex Securities Research has maintained its Buy rating on Padini Holdings Bhd with a lower target price of RM2.22 (from RM2.30) and said the company’s net profit in 4QFY14 was 35% lower as comparing to the previous quarter.
In a note Thursday, the research house said it was not surprised by the lower q-o-q earnings, as 4Q tends to be the seasonally quieter period amid the lack of festive season to boost sales.
“Looking ahead, we expect the group’s earnings in the coming quarter to be robust, as earnings would be supported by the shopping spree for Hari Raya Aidilfitri.
“We revise downward our earnings forecast for FY15F by 6.7% to account for the lower-than-expected margin. We also instate our earnings forecast for FY16F,” it said.
JF Apex said it remains convinced that Padini would register double-digit earnings growth in FY15F, premising on the kick in of earnings contribution from the aggressive stores opening in FY14 and FY15F.
“Padini remains our top pick in consumer sector for its rosy outlook that underpinned by steady stores expansion ahead.
“Besides, Padini is trading at undemanding valuation, P/E ratio of 11x FY15F EPS as compared to average PE ratio of consumer stocks of 17x and hence provides cheaper entry to consumer stock. We also like the Group for its attractive dividend yield of more than 5%,” it said.
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