Bonia's 1HFY13 numbers were below consensus and our estimates. Revenue grew by 6.6% y-o-y but earnings dipped 30.7% due to: i) higher start-up costs from its expansion in Indonesia and Vietnam, and ii) weaker sales from its Singaporean and Vietnamese operations. We see weaker numbers ahead after factoring in higher capex arising from new stores overseas. Maintain BUY, with a lower FV at RM2.62. Below estimates. Revenue went up by 6.6% y-o-y, thanks to stronger topline from Malaysia (+9% y-o-y), Indonesia (+90% y-o-y), Saudi Arabia (+15% y-o-y) and Vietnam (+RM5m y-o-y). Jeco's performance continued to be weak as its revenue contribution dropped 14% y-o-y from RM69.4m to RM59.7m. Similarly, royalty income was 7% lower y-o-y, from RM4.2m to RM3.9m on the back of lower sales volume.
Expansion still on track. Higher expenses arising from Bonia's regional expansion in Indonesia and Vietnam, and softer numbers coming from its Singaporean and Vietnamese operations have dragged down the group's earnings by 30.7% y-o-y. It opened five
boutiques in Vietnam and one boutique in Indonesia in 2Q. In the next quarter, Bonia will be opening two more boutiques - one each for Bonia and Carlo Rino - in Kemang Village, Jakarta. We do not expect any earnings contribution from Vietnam and Indonesia for the next two to three years.
Margins thin. Malaysia's consignment counters recorded a flat 1% y-o-y same-point-sales (SPS) growth while its boutique stores' same-store-sale growth (SSSG) was at a healthy 9%. The encouraging SSSG was mainly buoyed by higher sales from the Sembonia and Carlo Rino brands. Nevertheless, its Singapore stores registered SSSG of -5%. The EBIT margin dipped further from 18.5% to 13% due to higher operating expenses which grew in tandem with their business expansion.
Maintain BUY. Incorporating the lower revenue and higher expenses from the Indonesia and Vietnam start-ups, we are cutting our FY13 and FY14 numbers by 14.8% and 12.5% respectively. Maintain BUY, with a revised FV of RM2.62, based on 11x FY13 EPS.
Expansion still on track. Higher expenses arising from Bonia's regional expansion in Indonesia and Vietnam, and softer numbers coming from its Singaporean and Vietnamese operations have dragged down the group's earnings by 30.7% y-o-y. It opened five
boutiques in Vietnam and one boutique in Indonesia in 2Q. In the next quarter, Bonia will be opening two more boutiques - one each for Bonia and Carlo Rino - in Kemang Village, Jakarta. We do not expect any earnings contribution from Vietnam and Indonesia for the next two to three years.
Margins thin. Malaysia's consignment counters recorded a flat 1% y-o-y same-point-sales (SPS) growth while its boutique stores' same-store-sale growth (SSSG) was at a healthy 9%. The encouraging SSSG was mainly buoyed by higher sales from the Sembonia and Carlo Rino brands. Nevertheless, its Singapore stores registered SSSG of -5%. The EBIT margin dipped further from 18.5% to 13% due to higher operating expenses which grew in tandem with their business expansion.
Maintain BUY. Incorporating the lower revenue and higher expenses from the Indonesia and Vietnam start-ups, we are cutting our FY13 and FY14 numbers by 14.8% and 12.5% respectively. Maintain BUY, with a revised FV of RM2.62, based on 11x FY13 EPS.
SSource: OSK
