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
balance sheet.

“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.