Company Background. InNature is a leading regional retailer of cosmetics and personal care products carrying The Body Shop and Natura brands, serving customers across Malaysia, Vietnam and Cambodia through stores, e-commerce and other remote selling channels. As at 30 September 2022, the group has 113 stores across the region.

Prospects. (i) Driving productivity growth through an omnichannel strategy provides an integrated shopping experience where online and offline shopping experience will be seamless. (ii) Growing the brand portfolio of the group by developing a new business under the Natura brand in Malaysia. (iii) Expansion of The Body Shop retail store network and brand awareness in Vietnam and Cambodia. (iv) Setting up promotional kiosks to showcase limited-edition products and festive gifts at various locations.

Financial Performance. In 9MFY22, InNature reported revenue of RM108.6m (+23% YoY) with a PAT of RM14.7m (+2.0x YoY). This was mainly due to the normalisation of the operating environment post-Covid19 pandemic, rebound in revenue, improvement in gross profit margin and higher reimbursements from Natura.

Technical Analysis. We expect further upside for InNature after it broke out from the 1-week bullish flag pattern a few sessions ago. As the 20-day and 50-day EMAs have established their bullish crossover since mid-Dec22, the uptrend may persist in the near term. A bullish bias may emerge above the RM0.63 level, with a stop-loss set at RM0.58, below the 50-day EMA. Towards the upside, the near-term resistance level is seen at RM0.70, followed by RM0.75.

Source: AmInvest Research - 30 Jan 2023