As the manufacturing of apparel is always following the trend of consumer, change of season and preference may result in staking of huge inventory for the company which might be troublesome. Company might even decrease their stockpile by offering promotions and discounts which lower their profit margin. On the other hand, as the group only operates in Malaysia, its revenue will still be affected by global economic uncertainties as Malaysia's retails sales depends highly on tourist purchasing power.

 Free cash flow in the past years is rather not stable at all. A lot of drawdowns of loan is applied in order to finance the acquisition of brand where the company has no sufficient cash level to cover the deal which is risky. Acquisition of Audrey worth 138million makes up 72% of the whole company's non-current assets. This exposes the company's financial level at a very high risk. With the book value and market price valued at RM2.7 anRM3.85 respectively, it can be seen that the share is over price some more with high risk acquisition. However, the fact that some popular brands under the company's flagship is undeniable where the company may be valued at higher in the future. At current position, the company is bearing a high burden that spread to its stakeholders.
Stock: ASIABRN Code: 7722 Company:ASIA BRANDS BERHAD