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Company Update – Bonia (BUY, maintain) - Steady growth with attractive valuations




Affin Hwang Investment Bank Bhd


28 Jul 2013





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Valuations remain undemanding despite strong share price appreciation Since we upgraded Bonia from an ADD to BUY rating on 19 March 2013, Bonia’s share price has appreciated by 40%. Notwithstanding the strong share price performance, we reckon that current valuations at 10x FY14 PER is still very attractive vis-a-vis other retailers such as AEON and Parkson who are currently trading at 22x and 14x respectively. Our recent conversation with management revealed that demand for its products remains healthy. We have revised our FY14-15 EPS forecast by +7.4% and +6.8%, implying a yoy EPS growth of +15% and +14% for FY14-15 respectively. The upward earnings revision takes into account: 1) lower tax expenses; and 2) lower operating cost assumptions. We understand from management that the group’s boutiques expansion plans is almost complete. Therefore, we expect Bonia to incur lower expansion cost going forward

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