Padini 20120229 2Q12
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Transcript of Padini 20120229 2Q12
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Refer to important disclosures at the end of this report
HWANGDBS
Selling like hotcakes BUY RM1.33Price Target :RM 1.45 (Prev RM 1.40)ReportingPeriod Performance Mkt Cap FY EPSPre-Ex(sen)
EPS GthPre-Ex (%) EPSRevision PE (x) PBV (x) Net DividendYield (%)2Q2012 Above RM882m
US$291m2011A2012F2013F
11.513.614.7
24198
-44
11.69.79.0
3.22.62.2
3.04.14.4
Result SummaryFY Jun (RM m) 2Q12 2Q11 % ChgYoY 1Q12 % ChgYoYP&L itemsSales 202.5 141.8 42.8 178.1 13.7Gross Profit 99.1 70.0 41.6 88.0 12.7EBIT 39.5 20.8 90.4 37.2 6.2ExceptionalGain/(Loss) 0.0 0.0 n.m. 0.0 n.m.Pre-tax Profit 38.9 20.3 91.8 36.7 5.8Net Profit 28.6 14.5 97.1 26.9 6.0EBIT Margin (%) 19.5 14.6 20.9
BS & CF itemsInventoryTurnover 0.8x 0.6x 0.4xNet Cash/(Debt) 100.4 113.9 89.6Operating CashFlow 47.2 39.5 18.2
Price Relative
0.3
0.5
0.7
0.9
1.1
1.3
1.5
2008 2009 2010 2011 2012
RM
76
96
116
136
156
176
196
216
Relative Index
Padini Holdings (LHS) Relative KLCI INDEX (RHS)
At a Glance 6MFY12 earnings beat expectations; declares 2sen net
DPS, implying 46% quarterly payout
Brands Outlets to drive FY12-14F growth, boosted bymega sales; FY12-14F earnings nudged up 3-4%
Maintain Buy; TP nudged up to RM1.45Comment on Results
2QFY12 net profit grew 97% (+6% q-o-q) on the back of elevated
sales from an earlier Lunar New Year in 2012, as well as the
Christmas season. Revenue was also lifted by opening of new stores
in 1HFY12 - Brands Outlet stores in OneBorneo (Aug11), 1st Avenue
Penang (Oct11) and 1 Utama (Jul11), as well as Padini and Vincci
stores in Johor Premium Outlet (Dec11). This took 6MFY12 earnings
to RM64.6m, above expectations at 65% of our and consensus
estimates. Net margins improved 3.9ppt to 14.1% vs 2QFY11s
10.2% on higher cost efficiencies as inventories were moved quicker
between outlets. Padini declared 2sen net DPS for the quarter,
implying 46% payout.
We expect FY12F to be strong for Padini driven by strong revenue
from its Brands Outlet stores. Revenues should be lifted by the
Malaysia GP Sale 2012 that will run from 10 Mar to 15 Apr 2012,
and Malaysian Mega Sale and Year End Sale in 2H12. Hence, we
nudged up FY12-14F earnings by 3-4%, underpinned by higher-
than-expected same store sales growth and better performance atnew outlets.
Recommendation
We like Padini for its focus on effective cost management, robust
growth opportunities in its Brands Outlet stores, and stable dividend
payout (we expect c.40% payout for FY12F, translating into 4.1%
dividend yield). Maintain Buy with higher RM1.45 TP pegged to 10x
CY12F EPS.
ANALYST: CHONG Tjen San +603 2711 [email protected]
Malaysian Research Team +603 2711 [email protected]
Malaysia Equity Research PP 17581/11/2012(031103) 29 Feb 2012
Result Snapshot
Padini HoldingsBloomberg: PAD MK | Reuters: PDNI.KL
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Result Snapshot
Padini Holdings
HWANGDBS
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