Outlook. We look forward to Padini’s strong near-term performance being underpinned by robust consumer sentiment given the Aidil Fitri festivities, mass return to office, and cash withdrawals. Looking beyond the near term, with Padini’s close competitors phased out by the pandemic, the likelihood of market share gains should also bode well for the group, translating to better sales growth moving forward. Expansion plans may also start coming into play, in our view, with the nationwide transition to endemicity. However, we await further capex guidance from management at the analyst briefing on 1 Jun. While we maintain cognisance of inflationary pressures that may result in margin compression, we view positively management’s efforts in possibly curating a more favourable product mix that translated to improved QoQ GPM in 3QFY22.
if you look back the record for the third quarter y/e 30/6/2016, 2017, 2018, 2019, you will notice that in fact third quarter result are at par with the third quarter for the y/e 30/6/2022. in other words, PADINI already return to pre-covid performance. If the share price now is lower than pre-covid, you can just gobble up any shares if share price is below 2.9
Around RM2 to be exact, don't really remember lol Sold at 2.80 or 2.90 and bought back lower and later sold at 3 and 3.40 My best covid buy so far by percentage, but maybe Genting can top that if it continues the same path lol
Commentary on Prospect Retail business in general remains challenging in the financial year due to the possibility of any potential major outbreak of Covid-19 and supply chain disruption, increase in material costs, hike in freight charges and other inflation related issues. With the successful implementation of the vaccination program in Malaysia and barring any major outbreaks due to evolving Covid-19 variants, we are cautiously optimistic of maintaining the profitability upcoming financial year. Management will continue to provide value for money products and implementing measures to control costs, optimising working capital, preserving cash and streamline its operations to minimise the impact.
Outlook. Looking past the outstanding quarter underpinned by Aidil Fitri festivities, we continue to like Padini for its appeal as a value-for-money brand offering high-quality products, especially in the high likelihood of consumers downtrading amidst inflation. Market share gains, as a result of close competitors being phased out by the pandemic in the past two years, also bode well for the group, translating to better sales growth moving forward. We wait for further colour on strategies for the new year during the briefing on 1 Sep, but we gather at this point that Padini expects to open 3- 5 new stores in FY23. Its ability to maintain GPM despite high inflationary pressure is commendable, as it points to the group’s successful efforts in strategising its cost efficiency and product mix, and also adjusting prices.
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