Kenanga Research started coverage on Padini Holdings Bhd with a ‘market perform’ call and a target price of 1.84 ringgit per share, citing the garment retailer’s economies of scale and its strong foothold in the domestic market. ”We feel that Padini deserves a valuation closer to the larger retail industry players such as Amway and Aeon given the company’s bigger size and scale relative to the smaller garment retailers,” Kenanga said in a research note on Tuesday. Kenanga said it likes Padini for its extensive retail
network, strong revenue generating capabilities and healthy
“However, the potentially challenging retail landscape is
keeping us guarded on our estimates and recommendation,” it
added. The local retail industry has seen rising threat from domestic and international players, and fierce competition not just in terms of pricing, but also for prime locations as well as front-line staff, Kenanga said.
As of 1025am (0225 GMT), the counter remained unchanged at 1.83 ringgit per share, while the benchmark stock index rose 0.12 percent.