Bonia’s 1QFY13 results were within consensus and our estimates. Revenue inched up 3% as higher sales from Malaysia and the group‘s overseas operations mitigated the softer revenue from Jeco. However, earnings contracted 22.5% y-o-y due to higher investment costs arising from its expansion in Indonesia and Vietnam. Maintain BUY, with FV unchanged at RM3.08, as we remain positive on the group’s expansion over the long term.
Weaker numbers from Jeco. Revenue inched up marginally by 3% y-o-y as the decent topline growth in Malaysia (+3% y-o-y), Indonesia (+59% y-o-y), Saudi Arabia (+50% y-o-y) and Vietnam (+RM2.4m y-o-y) were partially offset by weaker sales from Jeco. Jeco’s revenue contribution plunged 26% y-o-y from RM32m to RM23.9m on lower exports given that: i) outright buying from its Indonesian dealer was weaker as it had overbought, and ii) recent strong appreciation of SGD. The group’s royalty income stood at RM1.3m vs RM3.7m y-o-y due to lower sales. Going forward, its royalty income will be realized on a quarterly basis instead of semi-annually.
Opening the wallet to fund regional expansion. Bonia’s net profit slipped 22.5% y-o-y, largely due to higher expenses arising from its expansion in Indonesia and Vietnam as well as the launch of the group’s first “Renoma Café Gallery” on 24 Oct 2012. It opened three boutique stores (1 Bonia, 1 Sembonia, 1 Carlo Rino) in Keangnam Hanoi Landmark Tower, Vietnam during the quarter at a total investment of RM5m. This was followed by four boutique stores - 1 Bonia, 1 Sembonia, 1 Carlo Rino, 1 Braun Buffel – at Vincom Center in Ho Chi Minh city at a cost of RM3.8m in October. In Indonesia, it will open seven new stores, of which six are Bonia boutiques and one Carlo Rino store, within FY13. Due to the high initial start-up cost, Vietnam and Indonesia’s operations are still loss-making. As such, we do not expect any profit contribution from these countries for the next two to three years.
Thinning margins. Malaysia’s consignment counters posted a 4% y-o-y same-point-sales (SPS) growth while its boutique stores saw a 1% same-store-sales (SSS) growth The Singapore stores, however, recorded negative 2% SSS growth. Elsewhere, gross profit and EBIT margins trended lower to 59.6% and 16.5% respectively due to higher operating expenses resulting from the group’s regional expansion.
Maintain BUY. Given that the results were in line, we are leaving our earnings forecasts unchanged. Maintain BUY, with a FV of RM3.08, based on 11x FY13 EPS.
FYE June (RM m)
|
FY10
|
FY11
|
FY12
|
FY13f
|
FY14f
|
Revenue
|
360.1
|
462.4
|
579.8
|
660.9
|
754.1
|
Net Profit
|
29.4
|
44.5
|
51.0
|
56.4
|
64.4
|
% chg y-o-y
|
42.5%
|
51.4%
|
14.7%
|
10.7%
|
14.2%
|
Consensus
|
56.8
|
64.0
| |||
EPS
|
14.6
|
22.1
|
25.3
|
28.0
|
32.0
|
DPS
|
5.0
|
5.0
|
5.0
|
8.0
|
9.2
|
Dividend yield (%)
|
2.1
|
2.1
|
2.1
|
3.3
|
3.8
|
ROE (%)
|
14.4
|
19.1
|
18.9
|
17.1
|
16.3
|
ROA (%)
|
12.6
|
10.5
|
9.7
|
11.7
|
11.6
|
PER (x)
|
16.5
|
10.9
|
9.5
|
8.6
|
7.5
|
BV/share
|
1.01
|
1.15
|
1.34
|
1.64
|
1.96
|
P/BV (x)
|
2.4
|
2.1
|
1.8
|
1.5
|
1.2
|
EV/EBITDA (x)
|
7.2
|
7.3
|
6.1
|
5.5
|
4.2
|
Results Table (RMm)
FYE Jun
|
1Q13
|
4Q12
|
Q-o-Q chg
|
YTD FY13
|
YTD FY12
|
Y-o-Y chg
|
Comments
|
Revenue
|
156.7
|
138.2
|
13.4
|
156.7
|
152.2
|
3.0
|
Mainly contributed by Malaysia and overseas op. except Jeco
|
EBIT
|
25.8
|
8.9
|
>100
|
25.8
|
33.2
|
-22.3
| |
Net interest expense
|
-1.5
|
-1.7
|
-11.8
|
-1.5
|
-1.5
|
0.0
| |
Associates
|
0.0
|
0.0
|
n.m
|
0.0
|
0.0
|
n.m
| |
PBT
|
16.6
|
7.2
|
>100
|
16.6
|
23.6
|
-29.7
|
Lower due to higher capex coming from aggressive expansion in Indonesia and Vietnam
|
Tax
|
-7.7
|
-2.1
|
>100
|
-7.7
|
-8.1
|
-4.9
| |
MI
|
-1.1
|
-1.3
|
-15.4
|
-1.1
|
-3.5
|
-68.6
| |
Core Net profit
|
15.5
|
3.8
|
>100
|
15.5
|
20.0
|
-22.5
|
In line
|
EPS
|
7.7
|
1.9
|
7.7
|
9.9
| |||
DPS
|
0.0
|
5.0
|
0.0
|
0.0
| |||
EBIT margin
|
16.5
|
6.4
|
16.5
|
21.8
| |||
EARNINGS FORECAST
FYE June (RM m)
|
FY10
|
FY11
|
FY12
|
FY13f
|
FY14f
|
Turnover
|
360.1
|
462.4
|
579.8
|
660.9
|
754.1
|
EBITDA
|
48.5
|
67.8
|
83.5
|
93.2
|
105.6
|
PBT
|
45.5
|
63.1
|
77.2
|
86.2
|
98.6
|
Net Profit
|
29.4
|
44.5
|
51.0
|
56.4
|
64.4
|
EPS
|
14.6
|
22.1
|
25.3
|
28.0
|
32.0
|
DPS
|
5.0
|
5.0
|
5.0
|
8.0
|
9.2
|
Margin
| |||||
EBITDA (%)
|
13.5
|
14.7
|
14.4
|
14.1
|
14.0
|
PBT (%)
|
12.6
|
13.6
|
13.3
|
13.0
|
13.1
|
Net Profit (%)
|
8.2
|
9.6
|
8.8
|
8.5
|
8.5
|
ROE (%)
|
14.4
|
19.1
|
18.9
|
17.1
|
16.3
|
ROA (%)
|
12.6
|
10.5
|
9.7
|
11.7
|
11.6
|
Balance Sheet
| |||||
Fixed Assets
|
80.9
|
155.3
|
176.2
|
194.8
|
212.6
|
Current Assets
|
186.0
|
218.5
|
245.5
|
286.2
|
343.3
|
Total Assets
|
266.8
|
373.7
|
421.8
|
481.0
|
555.9
|
Current Liabilities
|
41.9
|
77.6
|
88.6
|
83.6
|
93.1
|
Net Current Assets
|
144.1
|
140.8
|
156.9
|
202.6
|
250.3
|
LT Liabilities
|
19.2
|
48.6
|
48.9
|
52.4
|
53.4
|
Shareholders Funds
|
203.5
|
232.8
|
269.4
|
330.2
|
394.6
|
Net Gearing (%)
|
Net cash
|
Net cash
|
4.2%
|
Net cash
|
Net cash
|
Source: OSK
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