KLSE (MYR): PADINI (7052)
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Last Price
3.37
Today's Change
0.00 (0.00%)
Day's Change
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201,500
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daijiao
213 posts
Posted by daijiao > 2012-10-31 10:24 | Report Abuse
@euclid
Upgrade to TRADING BUY with unchanged TP of RM2.34
In conclusion, we view the goodies of Budget 2013 as a short-term positive catalyst for
Padini, although we remain concern on the discretionary spending post 13GE, as we
anticipate government to implement more aggressive subsidies rationalisation
programme, electricity tariff hike as well as GST, which will affect consumer disposable
income in the future.
However, Padini’s share price has corrected by 10% since our downgrade from strong
buy to NEUTRAL on 30 Aug 2012. This makes it more attractive now, as compared to a
month ago.
As such, we upgrade our call on Padini from neutral to TRADING BUY with unchanged TP
of RM2.34, based on 13x 12-month forward P/E. Our TP implies 11.4% capital upside,
underpinned by a net yield of 3.8% for FY13.
Key risks include (1) Europe debt crisis which may lead to global economic slowdown, (2)
potential tightening of personal credit by Bank Negara Malaysia, and goods and services
tax (GST) implementation which may affect consumers’ affordability, and (3) higher
costs pressure due to labour cost and cotton cost increase.