Company Focus
Padini Holdings
Bloomberg: PAD MK
|
Reuters: PDNI.KL
Malaysia Equity Research PP 11272/04/2012(029344)
BUY RM1.00 KLCI : 1,462.37
(Initiating Coverage)
Price Target: 12-Month RM 1.40
Reason for Report : Initiating coverage
Potential Catalyst: Domestic expansion of tourism & retail industry via
ETP initiatives
DBSV vs Consensus: Our EPS are higher than consensus
Analyst
CHONG Tjen San +603 2711 2295
tjensan@hwangdbsvickers.com.my
Malaysia Research Team +603 2711 2222
general@hwangdbsvickers.com.my
Relative Index
249
1.3
229
1.1
209
189
0.9
169
0.7
149
129
0.5
0.3
2007
109
2008
Padini Holdings (LHS)
2009
2010
89
2011
Relative KLCI INDEX (RHS)
Forecasts and Valuation
FY Jun (RM m)
Turnover
EBITDA
Pre-tax Profit
Net Profit
Net Pft (Pre Ex.)
EPS (sen)
EPS Pre Ex. (sen)
EPS Gth Pre Ex (%)
Diluted EPS (sen)
Net DPS (sen)
BV Per Share (sen)
PE (X)
PE Pre Ex. (X)
P/Cash Flow (X)
EV/EBITDA (X)
Net Div Yield (%)
P/Book Value (X)
Net Debt/Equity (X)
ROAE (%)
2011A
2012F
2013F
2014F
568
129
105
76
76
11.5
11.5
24
11.5
4.0
43.0
8.7
8.7
20.7
4.4
4.0
2.3
CASH
29.3
615
145
119
86
86
13.1
13.1
14
13.1
5.2
50.8
7.7
7.7
7.1
3.8
5.2
2.0
CASH
27.9
679
156
129
93
93
14.1
14.1
8
14.1
5.6
59.3
7.1
7.1
6.2
3.3
5.6
1.7
CASH
25.6
719
166
138
99
99
15.1
15.1
7
15.1
6.0
68.3
6.6
6.6
5.2
2.8
6.0
1.5
CASH
23.6
12.0
B: 4
13.3
S: 0
N/A
H: 0
Consensus EPS (sen):
Other Broker Recs:
The clothes make the brand
• Largest locally bred clothing & accessories retailer
with sizeable domestic presence
• Brands Outlet value segment is key growth driver
• Initiate coverage with Buy Rating with RM1.40 TP
Largest domestic apparel retailer. Padini is one of
Malaysia’s most profitable retail companies with 7 main
brands, catering to virtually all segments of the Malaysian
market, making it a resilient proxy to the retail industry. It had
an estimated brand value of RM244.7m (RM0.37/share) and
was consistently in Malaysia’s Top 30 Brands from 2007-09.
The group derives revenue from 45 single brand stores (23%
of FY11 revenue), 22 multi-brand concept stores (43%), 140
consignment counters in various department stores (13%) and
13 Brands outlets (10%) based on our estimates.
Price Relative
RM
4 Nov 2011
ICB Industry : Consumer Goods
ICB Sector: Personal Goods
Principal Business: Apparel and accessories retailer with
overwhelming domestic presence as well as exposure in high end,
mid-end and value clothing segments for all age groups.
Value segment ripe for the picking. Padini’s Brands Outlet
– which focuses on high-volume fast-selling garments at low
prices - has been its main revenue growth driver (+85% CAGR
over FY07-11). We expect this trend to continue in the near
term, in line with the group’s growth strategy to venture into
captive markets (townships and isolated areas) that lack
mainstream fashion outlets. Sales of other brands should
remain resilient, buoyed by rising affluence, attractive pricing
and fashionable products. For FY12, We expect Padini would
open 3 Brands Outlets, 1 Multi-Brand Concept Store, and 3
Single Brand outlets in selected shopping malls.
Buy with RM1.40 TP. At current price, Padini is cheaper than
its peers, trading at 45.6% (7.4x) discount to the CY12
average (13.6x). EPS has grown 48% (4-year CAGR) from
FY07-11 with a clean, net cash balance sheet. ROEs are
attractive over the next few years at c.23-28%, having
improved from 24% (FY06) to 29% (FY11). It also paid out at
least 30% of profits as dividends over the last 3 years, peaking
at 49% of net earnings in FY10 (c.4% dividend yield). We
initiate coverage with a RM1.40 target price pegged to 10x
CY12 EPS of 13.6 sen, driven by growth in Padini’s value
segment and expanding tourism & retail sectors.
At A Glance
Issued Capital (m shrs)
Mkt. Cap (RMm/US$m)
Major Shareholders
Pang Chuan Yong (%)
Puncak Bestari (%)
Capital Dynamics Asset Management (%)
Free Float (%)
Avg. Daily Vol.(‘000)
Sourceta: Company, DBS Vickers, Bloomberg
Refer to important disclosures at the end of this report
HWANGDBS
658
658 / 210
44.0
27.3
3.5
25.3
509
Company Focus
Padini Holdings
SWOT Analysis
Strengths
• Strong brand presence, having won accolades in Most
Valuable Brand surveys, with estimated brand value of
RM244.6m
• Diversified segments represented in different brands cater to
almost all ages as well as income groups
• Exposure in major retail centres, with outlets in most
prominent shopping complexes nation-wide
Weakness
• Forecasting fashion trends involves some degree of risk
• Scope of expansion is also dependent on supply of frontend retail staff
• Presently lacks international presence in most major
markets outside Asia and Arabian countries
• Clean balance sheet, net cash position with RM135m cash
pile available for distribution or store expansions
Opportunities
• Increasing income levels in Malaysia
• ETP projects to further fuel growth of retail and tourism
sector
• Malaysian value segment presents significant growth
opportunity
• Potential to enlarge international footprint
Threats
• Changes in cotton prices and increased minimum wage in
China could affect Padini’s mark-up and subsequently
margins
• Seasonally driven by sales promotions and festivities
• Potentially aggressive competition from new brand labels
penetrating the domestic market
• Dearth of front-end labour may impede rate of store
expansion
Source: DBS Vickers
Page 2
HWANGDBS
Company Focus
Padini Holdings
Company Background
Business Model
Corporate History. Padini Holdings is a Malaysian-based
clothing retailer - ladies’, men’s and maternity wear - under
several brands. It also sells ladies’ shoes and accessories. The
company was listed on the Bursa Second Board in 1998, and
transferred to the Main Board on 28 July 2004.
Domestic operations main earnings driver. Padini currently
has 80 free-standing stores, 22 of which are multi-brand
concept stores that showcase its brands. The bulk of its
consignment counters (total: 140) market the Seed (35%),
Padini (24%) and Miki (24%) brands. Domestic operations
contributed c. 90.7% (RM515.7m) of FY11 total turnover
(RM568.5m). Meanwhile, revenue for the group’s domestic
operations had ballooned to c. RM543.9m from RM281m in
FY07 (4-year CAGR of 18.0%). Domestic franchise stores are
limited to its Vincci brand (13 stores as at 28 February 2011),
with minimal annual contributions comprising royalties of 4%
(of monthly store sales) per month and an estimated franchise
fee of RM38k (excl. start-up capital of RM400k).
Padini was incorporated on 3 March 1975 under the name
Hwayo Sdn Bhd, and subsequently changed to Padini
Corporation Sdn Bhd in May 1990 and to Padini Holdings
Group on 19 June 1992. The group has since transformed
into a prominent clothing retailer with an enduring presence
in the Malaysian retail market.
Versatility in brand variety. Padini Holdings operates a chain
of stores as well as consignment outlets throughout Malaysia.
Among Padini’s brands include: Seed, Vincci, P&Co, PDI,
Padini Authentics, Miki and Padini. These brands are
segregated under wholly-owned trading subsidiaries Vincci
Ladies’ Specialties Centre, Padini Corporation, Seed
Corporation, Mikihouse Children’s Wear and Yee Fong Hung
(Malaysia).
Fig. 1: Padini Brands
Miki Kids
Children's wear catering for those between
3-13
Miki Maternity
Maternity line for the working mother-to-be
Padini
Garments for office and official occasion;
Designed for modern executives and
managers between the mid 20's and late
30's; both genders
Padini Authentics
PDI
Casual wear for those between 5 and 45;
both genders
Basic garments for teens to the 30's; both
genders
P&Co
Edgy, experimental fashion for females
between the mid teens and mid 20's
Seed
Contemporary adult fashion designed for
both genders between the 20's and early
30's
Affordable and fashionable women's shoes
and accessories
Vincci
Vincci
+
Higher priced handbags
Generally, Padini’s revenue stream is derived as a function of
new stores opened during the financial year. This is evident in
FY08 when it increased its retail area by more than 50%
(143,955 sq ft), and net profit increased by 33% over FY07FY08. Total retail area for the company had increased at a
CAGR of 27.6% for FY06-FY10 to 524,972 sq ft.
Some regional presence. In addition, Padini has exposure in
the ASEAN region,Saudi Arabia and the UAE via franchise and
dealer stores. But its product range there is limited to Vincci,
Seed and Padini Authentics. These exports only contributed
RM52.8m or 9.3% of FY11 total revenue as they have not
been a main focus for the group.
Fig. 2: Revenue by Segment FY07-11
RM 'm
600.0
520.9
500.0
400.0
300.0
568.5
475.5
383.3
316.9
200.0
100.0
0.0
07
08
Consignment
09
Own Store
10
11*
Others (Exports etc)
Source: Company, DBS Vickers
*FY11 figures are estimated.
Source: Company, DBS Vickers
HWANGDBS
Page 3
Company Focus
Padini Holdings
Fig. 3: Business Functions
Retail Outlets
Stores/Counters
Franchise/Dealership
-49 standalone
single brand stores
-Franchise
Domestic – 13
Foreign – 72
-20 standalone
multi-brand concept
stores
Cafes
-Standalone
-1 at head office
-Dealership (Foreign)
Stores – 13
Counters – 10
-12 Brands Outlets
-139 Consignment
Counters
Source: Company, DBS Vickers
Fig. 4: Padini Brands
*Clockwise from top left: Padini, Padini Authentics, PDI, Miki Kids, Miki Maternity, Vincci, Seed, P&Co
Source: Company
Sales Trend
Profitability Trend
RM m
RM m
20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
800
700
600
500
400
300
200
100
0
2010A
2011A
Total Revenue
2012F
2013F
2014F
Revenue Growth (%) (YoY)
140
130
120
110
100
90
80
70
60
2010A
Operating EBIT
2011A
2012F
Pre tax Profit
Source: Company, DBS Vickers
Page 4
HWANGDBS
2013F
2014F
Net Profit
Company Focus
Padini Holdings
Purchases of finished goods the main cost item. Padini’s
cost structure is centred on purchases of finished goods
(i.e. garments, handbags, accessories and shoes) that it
sources from factories in Southern Coastal China.
However, due to labour supply shortages (as well as wage
increases) in the Southern China region, the group has
shifted supply to Northern areas such as Ningbo to source
for finished garments. Despite a large garment
manufacturing sector in India, quality issues have not
compelled the group to begin sourcing from Indian
manufacturers. Purchases of finished goods have
historically contributed 50-56% of operating costs save
for FY08 (75%), possibly a result of the onset of the
global financial crisis and increases in cotton prices.
Inventory was accordingly high at RM116.1m, reflecting
the increase in purchases during this period.
Garment designs are typically sent to manufacturers in
China or Malaysia (depending on complexity of design)
where test designs are produced and sent to the group.
Upon final confirmation of the design, Padini would enter
a fixed agreement purchase order with garment
manufacturers (via an agent) to produce and deliver the
finished product. On average, lead-in time from order to
delivery stands at 6 months per order. Knitted items such
as graphic t-shirts are sourced from manufacturers in
Malaysia while woven items (i.e. jeans and slacks with
washed designs) are produced in China.
Fig. 5: Operating Costs by Segment FY07-11
600.0
RM 'm
Sales staff costs and Retail Store Rentals make up the
second highest cost items – both at 11-13% historically.
Cost of sales staff had increased at a CAGR of 13.3% from
FY07-FY11 while retail store rentals increased 14.3%
annually over the period. This is very much in line with the
company’s expansion plans in terms of opening new stores
and employing retail staff accordingly. Padini opened 5
Vincci Stores, 5 Brands Outlet stores, 1 PDI Store and 2
Multi-Brand Concept Stores between FY09 and FY11.
Fig. 6: FY11* Operating Cost Breakdown
Depreciation - al
fixed assets
5%
Advertising &
Promotion
2%
Rental of Retai
Stores
12%
Others
8%
Head Office
Staff Costs
7%
Purchases
53%
Selling Staff
Costs
13%
*FY11 Figures are estimated
Source: Company, DBS Vickers
500.0
400.0
300.0
200.0
100.0
0.0
07
08
09
10
Purchases
Selling Staff Costs
Head Office Staff Costs
Rental of Retail Stores
Depreciation - all fixed assets
Advertising & Promotion
11*
Others
*FY11 figures are estimated
Source: Company, DBS Vickers
HWANGDBS
Page 5
Company Focus
Padini Holdings
Management
Mainly family-owned. Padini is still a family-owned and run
enterprise, with the founding Yong family owning c. 44% of
the group’s stock. Several of the family members currently
hold positions in the management team as well as board of
directors. Puncak Bestari is the 2nd largest shareholder with
27% equity stake.
Management Composition. Most of Padini’s management
team has been in the group for over 10 years, starting out in
the group’s subsidiaries. Collectively, management has a
balanced and complementary mix of experience as well as
exposure in the retail industry (and manufacturing
operations), which would aid the group in attaining continual
success in its ventures.
Key Management Team
Name
Position
Qualifications/Management Experience
Datuk Dr Abdullah bin Abdul Rahman
Chairman, Audit Committee Member,
Independent Non-Executive Director
- Master of Public Administration from University of Southern California
- BA (Hons) from University of Malaya
- Ph.D. in Public Administration from University of Southern California
- Former Director General of the Malaysian Administrative, Modernisation and Planning Unit
(MAMPU)
- Also a director in Tracoma Holdings Bhd
Yong Pang Chaun
Managing Director
- Extensive hands-on experience in textiles and apparel industry
- Set up Padini's first subsidiary in 1971 to manufacture ladies fashion
- Manages the strategies and plans forPadini Group's future
Chan Kwai Heng
Executive Director
- Bachelor of Economics (Hons) degree from University of Malaya
- European MBA from Paries Graduate School of Management
- Manager in charge of Finance and Administration in Vincci Department Store Sdn Bhd
- Oversees the finance and administrative activities of Padini Group
Cheong Chung Yet
Executive Director
- Bachelor of Accountancy (Hons) from University of Malaya
- Was Manager of the Merchandising department of Isetan of Japan Sdn Bhd in 1995
- Extensive experience in retail management (and operations and merchandising, concept
planning, branding and merchandising for in-house labels.
- Head of Padini's merchandising and retail departments
Chong Chin Lin
Executive Director
- Considerable experience in the wholesale and retail of fashion accessories and costume
jewellery
- Was merchandiser for ladies fashion wear and accessories in Vincci Ladies' Specialties Centre
Sdn Bhd
- Oversees Padini's garment manufacturing operations
Yong Lai Wah
Executive Director
- Business experience and exposure in manufacturing operations and wholesale of fashion
wear
- Involved with the manufacturing and selling of fashion wear to local department stores and
boutiques
Sahid bin Mohamed Yasin
Audit Committee Chairman, Independent NonExecutive Director
- Bachelor of Arts degree in Economics from University of Malaya
- Postgraduate Diploma in Management Science from the National Institute of Public
Administration
- Held a senior management position in Malaysia British Assurance Sdn Bhd for 5 years
- Was Manager for Corporate Services of Hicom holdings Bhd from 1983-1995
Foo Kee Fatt
Audit Committee Member, Independent NonExecutive Director
- Member of Malaysian Institute of Certified Public Accountants and Malaysian Institute of
Accountants
- Approved company auditor under Section 8 of Malaysian Companies Act, 1965
- Held various positions with loval and international accounting firms
- Also an independent non-executive director in Central Industrial Corporation Bhd
Source: Company, DBS Vickers
Page 6
HWANGDBS
Company Focus
Padini Holdings
Competitive Strengths
Diversified brand portfolio. Padini has a large product offering
for its customers. It offers luxury and high fashion items that
cater to upmarket consumers (Seed, Padini, Vincci+),
affordable, core value garments for the lower to middleincome earners (Brands Outlets, Vincci, Padini Authentics),
and its own children’s and maternity wear (Miki). It recently
started to offer children’s wear under Seed and Padini. These
brands complement each other in Padini’s product mix, and
could help the group to reduce earnings volatility during
economic downturns or a slowdown in the retail industry.
The diverse product lines also expose Padini to a larger slice of
the proverbial retail pie, given its brands’ specific target
markets. The group is also one of most preferred brands
among Malaysian consumers, based on accolades in the Putra
Brands Award 2010 (Gold) and 2011 (Bronze), as well as one
of Malaysia’s 30 most valuable brands (2007: 26th, 2008:
25th and 2009: 23rd). Its reported brand value as at 2009
was RM244.6m.
Brand valuation methodology. Malaysia’s 30 most valuable
brands awards are conducted by the Association of
Accredited Advertising Agencies of Malaysia (4 A’s) in
collaboration with Interbrand – the world’s leading brand
consultant. Brands are valued on several metrics: financial
analysis (forecast current and future revenue attributable to
the brand), role of brand analysis (measure of brand influence
on customer demand at point of purchase), and brand
strength analysis (benchmark of the brand’s ability to secure
ongoing customer demand). The Putra Brands Awards on the
other hand, measures brands by consumer preference, and is
the only brands award in the country endorsed by the
Malaysian External Trade Development Corporation
(Matrade). Brands are analysed using a robust consumer
research methodology developed by 4A’s partner Pulse
Group.
Strong Domestic Presence. Padini has a total of 80 freestanding stores and 140 consignment counters scattered
around Malaysia. It has outlets in most major shopping
centres nationwide, including 1 Utama Shopping Complex,
AEON Bukit Tinggi Shopping Centre, City Square Shopping
Complex, and Gurney Plaza Penang. Having been in the
Malaysian retail business since 1975, Padini has substantial
knowledge of the domestic market and consumer profiles in
each location. This allows it to decide on which stores in its
brands portfolio would maximise revenue per sq ft of retail
space. Its plethora of outlet awards gives it a competitive
edge over competitors such as Uniqlo, Giordano, Zara, Bonia
and Kamdar, which have limited presence outside the Klang
Valley.
Fig. 7: Padini, Kamdar & Bonia Malaysia
Presence by location*
Locations
No of Stores
Johor
Padini
Kamdar
Bonia
25
2
2
KL
31
4
5
Melaka
12
1
3
Pahang
15
1
2
Penang
25
3
3
Perak
8
4
0
Selangor
58
4
6
Sarawak
9
1
1
Negeri Sembilan
2
0
0
Sabah
9
1
5
Putrajaya
1
1
0
Terengganu
1
2
0
Kelantan
1
1
0
Kedah
2
3
0
*As disclosed on Padini, Kamdar and Bonia websites, but does not
encompass all the shops
Source: Companies, DBS Vickers
Robust Market Fundamentals. Padini has a healthy balance
sheet with net cash position, allowing room for further
expansion and to open more retail outlets. It also has a large
cash pile to fund more capital expenditure projects or reduce
its already minimal debt. The group has consistently paid out
dividends of at least 30% of its net income, an indication of
its commitment to shareholders. Padini is expected to
distribute RM26.3m (34.7%) out of its RM75.7m FY11 net
profit. The group has also been able to consistently improve
its operational cost efficiency over time, producing 47.6% in
EPS growth (4-year CAGR) from FY07-FY11. EBIT margins
have crept up from 14.0% in FY07 to 18.8% in FY11, a
testament of improving cost efficiencies through wellmanaged supply chain management and lower inventory
write-downs.
HWANGDBS
Page 7
Company Focus
Padini Holdings
Growth Prospects
Penetrating the value segment. Padini opened its first Brands
Outlet value store in FY07, achieving same store sales growth
of 16-20% (in its Brands Outlets) ever since. Its revenue
contribution has grown at a 4-year CAGR of c. 59.7%, from
1.5% in FY07 to approximately 9.8% in FY11 (estimated),
one of its fastest growing segments. Fig. 6 depicts Yee Fong
Hung’s (operator of Brands Outlet) pre-tax profit before
(FY06) and after (FY07 onwards) the Brands Outlets were
introduced.
Fig. 9: Estimated revenue growth rates of Brands
Outlets vs Multi-Brand Concept Store
180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
-
%
08
Fig. 8: Pre-tax Profit of Yee Fong Hung (Brands
Outlet Operator: FY06-10)
Pre-tax Profit (RM'm)
09
10
11*
Brands Outlets
12F
13F
14F
Multi-Brand Concept Stores
Pre-tax Profit (Growth (%)
12
600
10
400
8
*FY11 numbers are estimated
Source: Company, DBS Vickers
200
6
0
4
-200
2
0
-400
06
07
08
Yee Fong Hung
09
10
11*
Yee Fong Hung Growth
*FY11 numbers are estimated
Source: Company, DBS Vickers
This is a departure from its Multi-Brand Concept Stores,
which house most of Padini’s other brands, namely: Padini,
Padini Authentics, Seed, PDI, and Miki (Maternity and Kids).
Focus of the group’s concept stores are to display its myriad
fashion brands as well as provide a consolidated one-stop
centre with which consumers may view and purchase Padini’s
fashion items. Pricing-wise, Multi-Brand Concept Stores offer
slower-selling, higher margin garments than that of Padini’s
Brands Outlets.
We understand the group plans to focus on opening stores in
isolated townships such as those in East Malaysia, where it
hopes to leverage on a captive market. Capital expenditure
should be relatively minimal as retail space is rented via lease
agreements rather than acquired. One of the strategies
management is looking at to compensate for shortage of
front-end retail staff is to outsource operations to native
companies and reap 12-15% of store sales as income. This is
currently practiced by Factory Outlet Stores (F.O.S.) in East
Malaysia.
Fig.10: Correlation of total store area vs total
revenue
Area (sq ft)
Revenue (RM 'm)
700,000
800.0
600,000
700.0
600.0
500,000
500.0
400,000
400.0
300,000
300.0
200,000
200.0
100,000
100.0
0
0.0
06
07
08
09
10
Total Store Area
*FY11 numbers are estimated
Source: Company, DBS Vickers
Page 8
HWANGDBS
11*
12F
Total Revenue
13F
Company Focus
Padini Holdings
Increasing affluence. Malaysia’s Gross National Income per
capita has increased at 6.43% CAGR from US$2,250 in 1980
to US$13,710 in 2009, based on World Bank statistics.
Statistics from the Malaysian Economic Planning Unit show
that Malaysians who earned less than RM1000/month
comprised 82.7% in 1979, but fell precipitously to 7.3% in
2009. Conversely, higher income groups (RM3000 and
above) grew from 2.3% in 1979 to 47.3% in 2009, a
reflection of an expanding middle class segment.
Fig. 11: Monthly Income Groups over time:
1979-2009
90
%
Fig. 12: Gross National Income per Capita: 19802009
16000
US$
14000
12000
10000
8000
6000
4000
2000
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
0
1980
The group has recently opened Brands Outlets in Suria Sabah,
Kota Kinabalu (May 2011), 1st Avenue, Penang (Oct 2011),
and in 1Borneo Shopping Mall (as well as 1 Multi-Concept
Store in Aug 2011), Sabah. Padini will also be expanding
within the Klang Valley as well: in Setia City Mall, Shah Alam,
and The Paradigm Mall, Kelana Jaya (slated for completion in
late 2011 to early 2012). We understand that as a result of
this, the group is increasing the proportion of fast selling,
value items (such as its Brands Outlets products) in its
inventory to approximately 80% from its previous 50%. This
should lead to higher inventory turnover and subsequently
lower working capital required for the company. Investment
costs for Brands Outlets are much lower than that of MultiBrand Concept Stores at half of the latter’s total investment
outlay. This is because there is less focus on store renovations
and greater floor space in favour of a simple and tasteful,
albeit systematic, store layout with convenience and
accessibility in mind.
Malaysia
Source: World Bank, DBS Vickers
ETP projects to provide boost. Economic Transformation
Programme (ETP) projects and initiatives by the Malaysian
Government may serve to boost income levels as well,
provided they take off. Padini should be able to capitalise on
Malaysia’s growing affluence as people are able to afford
higher priced items, on top of the value products the group
offers. Brands such as Padini, Padini Authentics and Seed
could see higher revenue from an increasingly wealthy (and
thriving) customer base. Capitalising on this trend, the group
is consolidating its single brand stores into multi-brand
concept stores, where consumers have access to all of
Padini’s in-house brand collections. We understand the group
will be opening 2 new concept stores in FY12 (in Paradigm
Mall and Setia City Mall).
80
70
60
50
40
30
20
10
0
1979
1984
1987
1989
1992
< 500 - 999
1995
1997
1000 - 2999
1999
2002
2004
3000 - > 5000
Source: Economic Planning Unit, DBS Vickers
2007
2009
Exciting Retail Climate. The Malaysian Government’s ETP
Initiative aims for the Retail National Key Economic Area
(NKEA) to contribute an additional RM107.8bn to GNI by
2020. The government launched new sales events (as part of
several Entry Point Projects (EPP)) to drive consumption via the
‘1Malaysia Unified Sale’ held from 15 Jun 2011 to 31 Aug
2011. In addition, the development of 1Malaysia Malls to
promote and market Malaysian brands was among the EPPs
announced. These would allow Padini to benefit via greater
exposure from nationwide retail promotions as well as
opportunities to widen its footprint as shopping centres pop
up. However, we note that the 1Malaysia Malls would be
built on foreign soil (1st two target markets: Vietnam and
China). Although Padini’s focus is not to expand its overseas
operations, 1Malaysia Mall developments might present an
avenue for the group to penetrate foreign markets without
overt risks.
Furthermore, EPPs aimed at reviving the Malaysian tourism
industry and attracting 36m tourists by 2020 might enable
HWANGDBS
Page 9
Company Focus
Padini Holdings
Padini to piggyback on increased store activity in popular
shopping centres such as Ikano Power Centre (location of one
of its most profitable Brands Outlets). In addition, other EPPs
such as establishing Premium Outlets (heavily discounted outof-season luxury items or new luxury products for market
testing) in Iskandar Malaysia, Sepang and Penang would
allow Padini to unload off-season inventory or those to be
written down. This would most likely be luxury brands in the
group’s portfolio such as Seed and Padini. We understand
Padini has signed up for its Vincci, Padini and Seed brands to
open outlets (approximately 7,700 sq ft total) at Iskandar
Malaysia Premium Outlet, which is scheduled to start
operations in Dec 2011.
Key Risks
Exposed to raw material prices & labour. Padini’s materials
are in the form of finished goods, but increases in cotton
prices, appreciation of the Chinese RMB, and minimum wage
hikes in China would translate into higher garment prices.
While cotton prices have fallen from their high of US$205/lb
in Feb of 1Q11, they are still trading relatively higher from the
2010 average of US$96/lb (1H11: US$178/lb vs 1H10:
US$80/lb).
Purchase orders are also locked in at the inception of Padini’s
fixed agreements with garment manufacturers, which would
further cushion the group against fluctuations in cotton
prices. However, its agent will request advanced payments
from the group if there are substantial price movements in
the cotton markets. But even if this happens, Padini’s strong
cash position and squeaky clean balance sheet would allow it
to take on additional financing to increase working capital.
Furthermore, cash reserves tend to be replenished over time
due to the nature of Padini’s retail business that allows it to
collect revenue regularly.
Fig. 13: Cotton Futures Prices: 1995-2011
Cotton Price (US$)
250.00
200.00
150.00
100.00
50.00
The China Daily reported that the country’s minimum wage
will rise by an average rate of 13% p.a. over the next 5 years.
With its garments predominantly produced in China, Padini
may be forced to absorb the higher costs passed on by its
suppliers, which would reduce the mark up it makes on
garment sales. The company may be able to pass on costs to
consumers, but it generally does not take the lead to increase
its retail price offerings. In any case, its purchase orders via
fixed agreements also mitigate the impact of substantial cost
fluctuations after an order has been made.
Shortage of retail labour. Padini’s pace of store expansion is
contingent upon its ability to procure front-end retail staff.
However, we understand that the Malaysian Government will
ensure adequate labour supply of retail staff by increasing
graduate numbers in retail studies as well as tapping
alternative sources of workers. Among the initiatives planned
are: encouraging greater participation in the workforce by
groups like homemakers, foreign workers’ spouses, senior
citizens and students; and delivering more retail-focused
modules in institutions of higher learning.
Seasonally driven. Padini’s sales generally fluctuate with
seasonal festivities such as Hari Raya, Christmas and the
Chinese Lunar New Year. Nationwide sales programs such as
the Malaysian Mega-Sale and Merdeka Sale are also potent
revenue drivers. However, during quiter periods with no
festivities (typically every 4Q of Padini’s FY or Apr-Jun
quarter), the group sees comparatively lower sales figures.
However, this is a known characteristic of the retail industry
and is not expected to have substantial impact on Padini’s
overall financial performance.
Entry of foreign players to the domestic market. Malaysia has
seen a number of foreign brands (Uniqlo, Charles & Keith,
Cotton-On, etc) enter the country trying to tap on increasing
domestic affluence, and that has resulted in mounting
competition in the retail industry. Privately-owned company
Charles & Keith began operations in Malaysia in July 2008,
while affordable yet trendy clothing retailers Uniqlo and
Cotton On opened their doors in November 2010 and
September 2009, respectively. In spite of such competition,
we do not expect Padini’s performance to falter as the group
has logistical efficiencies, market knowledge and a long
history in Malaysia’s retail sector.
Cotton Futures
Source: Bloomberg, DBS Vickers
Page 10
Feb-11
Feb-10
Feb-09
Feb-08
Feb-07
Feb-06
Feb-05
Feb-04
Feb-03
Feb-02
Feb-01
Feb-00
Feb-99
Feb-98
Feb-97
Feb-96
Feb-95
0.00
Exposure to transient changes in fashion. Fashion trends
often do not last more than a season, as such inventory of
out-of-style trends are forced to be written down, resulting in
wastage of resources. Moreover, there is inherent risk in
forecasting the right trends. Inaccurate forecasts would result
in poorer sales from unattractive fashions, as well as more
inventory write-downs.
HWANGDBS
Company Focus
Padini Holdings
Key Assumptions
FY Jun
Sensitivity Analysis
2009A
2010A
2011A
2012F
2013F
Multibrand SSSG* (%)
12.3
8.1
8.0
5.0
5.0
Brands SSSG* (%)
20.1
16.0
16.0
8.5
8.5
8.5
Single Brand SSSG* (%)
4.8
0.3
1.0
0.8
0.8
0.8
New Store Area (Sq Ft)
Store Area Growth (%)
2012
2014F
5.0
89,018.0 46,506.0 33,000.0 47,700.0 60,000.0 45,000.0
(38.2)
(47.8)
(29.0)
44.5
25.8
2009A
2010A
2011A
2012F
2013F
2014F
Revenues (RM m)
Multi-brand Concept
Stores
Single-Brand Stores
183
212
244
261
289
309
130
130
131
133
146
147
Brands Outlets
28
47
56
84
105
121
Consignment Revenues
74
74
75
77
78
79
60
57
62
60
61
63
475
519
568
615
679
719
41
52
63
72
75
79
Others (Exports, Cafes
etc)
Total
Profit Before Tax (RM
)
Multi-brand
Concept
Stores
Single-Brand Stores
17
22
26
24
24
25
Brands Outlets
1
6
10
17
21
24
Consignment Revenues
3
4
5
4
5
5
Others (Exports, Cafes
etc)
6
2
0
2
4
4
68
86
105
119
129
138
24.5
25.8
27.4
25.8
25.6
13.0
16.6
20.0
17.9
16.8
17.3
3.9
13.7
18.2
20.6
20.1
19.8
4.6
5.9
7.0
5.4
5.8
6.1
9.4
3.9
0.5
4.1
6.6
6.7
14.2
16.6
18.5
19.4
18.9
19.1
Total
Profit Before Tax Margins (%)
Multi-brand Concept
22.1
Stores
Single-Brand Stores
Brands Outlets
Consignment Revenues
Others (Exports, Cafes
etc)
Total
Net Profit +/1.0%
Net Profit +/0.3%
Net Profit +/0.5%
(25.0)
Segmental Breakdown**
FY Jun
Multibrand SSSG*
+/- 1ppt
Brands SSSG* +/1ppt
Single Brands
SSSG* +/- 1ppt
Will open 1 Multibrand
Concept Store, 3 Brands
Outlets Stores and Johor
Premium Outlet stores
(Vincci, Seed and Padini)
Brands Outlets to be main
revenue driver at 29.3%
CAGR for FY11-FY14F
Multi-brand Concept Store
expected to remain the main
earnings contributor with
higher product margins and
more brands under its
umbrella (Padini, Padini
Authentics, PDI, Seed)
* SSSG – Same Store Sales Growth
**Segmental Revenue & Pre-tax profit numbers estimated as these numbers are not disclosed
in Padini’s financial statements.
Source: Company, DBS Vickers
HWANGDBS
Page 11
Company Focus
Padini Holdings
Income Statement (RM m)
FY Jun
Margins Trend
2009A
2010A
2011A
2012F
2013F
2014F
475
519
568
615
679
719
(242)
(260)
(278)
(298)
(336)
(348)
234
259
291
317
343
371
(164)
(172)
(184)
(195)
(212)
(230)
69
87
107
121
131
140
Other Non Opg (Exp)/Inc
0
0
0
0
0
0
Associates & JV Inc
0
0
0
0
0
0
(2)
(1)
(2)
(2)
(3)
(3)
21.0%
20.0%
Revenue
Cost of Goods Sold
Gross Profit
Other Opng (Exp)/Inc
Operating Profit
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Preference Dividend
Net Profit
0
0
0
0
0
0
68
86
105
119
129
138
(18)
(25)
(29)
(33)
(36)
(38)
0
0
0
0
0
0
0
0
0
0
0
0
50
61
76
86
93
99
Net Profit before Except.
50
61
76
86
93
99
EBITDA
89
109
129
145
156
166
Growth
Revenue Gth (%)
24.0
9.1
9.6
8.2
10.5
5.8
EBITDA Gth (%)
24.9
22.9
18.1
12.2
7.7
6.5
Opg Profit Gth (%)
18.3
26.4
22.0
13.8
8.2
6.8
Net Profit Gth (%)
18.6
23.1
24.1
13.6
7.8
7.0
Gross Margins (%)
49.1
50.0
51.2
51.5
50.5
51.5
Opg Profit Margin (%)
14.5
16.8
18.8
19.7
19.3
19.5
Net Profit Margin (%)
10.4
11.8
13.3
14.0
13.6
13.8
ROAE (%)
26.5
27.8
29.3
27.9
25.6
23.6
ROA (%)
17.8
18.8
18.9
18.5
18.0
17.2
ROCE (%)
23.4
24.3
25.5
24.5
23.1
21.7
Div Payout Ratio (%)
31.9
45.3
48.6
34.8
40.0
40.0
40.0
79.9
67.8
60.8
50.7
55.6
19.0%
18.0%
17.0%
16.0%
15.0%
14.0%
13.0%
12.0%
11.0%
2010A
2011A
Operating Margin %
2012F
2013F
2014F
Net Income Margin %
Expect consistently high gross
margins due to efficient
product mix between high
fashion display garments and
fast selling value garments
that would increase overall
sell-through rates
Margins & Ratio
Net Interest Cover (x)
Source: Company, DBS Vickers
Page 12
Net profit is expected to grow at
9.4% 3-year CAGR on the back of
store expansions and streamlined
operations management efficiency
through the ERP system. The
implementation of ETP to increase
tourist arrivals as well as expand
retail sector contributions to Gross
National Income may further
underpin earnings visibility.
Surging income levels of previously
low income earners could be a
further sales catalyst.
HWANGDBS
Company Focus
Padini Holdings
Balance Sheet (RM m)
FY Jun
Net Fixed Assets
Invts in Associates & JVs
Other LT Assets
Asset Breakdown
2009A
2010A
2011A
2012F
2013F
2014F
77
81
84
101
117
131
0
0
0
0
0
0
4
12
11
10
10
10
Cash & ST Invts
85
155
139
158
188
236
Inventory
92
77
171
153
166
163
Debtors
12
17
19
39
44
46
Other Current Assets
21
16
21
21
21
21
291
357
444
483
545
607
ST Debt
29
26
25
24
23
21
Other Current Liab
Total Assets
55
85
113
101
109
113
LT Debt
3
10
22
22
22
22
Other LT Liabilities
0
1
2
2
2
2
204
234
283
334
390
449
Minority Interests
0
0
0
0
0
0
Total Cap. & Liab.
291
357
444
483
545
607
Shareholder’s Equity
Non-Cash Wkg. Capital
70
24
98
113
121
118
Net Cash/(Debt)
53
119
92
112
143
192
Debtors Turn (avg days)
9.8
10.4
11.6
17.3
22.3
22.8
Creditors Turn (avg days)
54.6
56.4
86.4
74.8
45.9
47.9
Inventory Turn (avg days)
170.8
129.3
176.9
215.3
186.8
186.0
1.7
1.6
1.4
1.3
1.3
1.2
Current Ratio (x)
2.5
2.4
2.5
3.0
3.2
3.5
Quick Ratio (x)
1.2
1.5
1.1
1.6
1.8
2.1
CASH
CASH
CASH
CASH
CASH
CASH
Net Debt/Equity ex MI (X)
(0.3)
(0.5)
(0.3)
(0.3)
(0.4)
(0.4)
Capex to Debt (%)
62.6
NA
76.0
9.2
87.2
89.6
91.9
6.1
5.7
6.2
6.1
5.2
Asset Turnover (x)
Net Debt/Equity (X)
Z-Score (X)
Inventory 34.0%
Debtors 8.8%
Net Fixed
Assets Associates'/J
22.3%
Vs 0.0%
Bank, Cash
and Liquid
Assets 34.9%
Healthy balance sheet
to fuel further store
expansions and perhaps
overseas operations.
Source: Company, DBS Vickers
HWANGDBS
Page 13
Company Focus
Padini Holdings
Cash Flow Statement (RM m)
Capital Expenditure
2009A
2010A
2011A
2012F
2013F
2014F
Pre-Tax Profit
68
86
105
119
129
138
Dep. & Amort.
20
22
23
24
25
26
FY Jun
Tax Paid
(15)
(27)
(29)
(6)
(33)
(36)
Assoc. & JV Inc/(loss)
0
0
0
0
0
0
Chg in Wkg.Cap.
5
27
(69)
(42)
(11)
1
Other Operating CF
4
3
2
(3)
(3)
(3)
Net Operating CF
81
111
32
92
106
127
Capital Exp.(net)
(20)
(28)
(4)
(40)
(40)
(40)
Other Invts.(net)
1
1
2
3
3
3
Invts in Assoc. & JV
0
0
0
0
0
0
Div from Assoc & JV
0
0
0
0
0
0
Other Investing CF
0
0
0
0
0
0
Net Investing CF
(19)
(26)
(2)
(37)
(37)
(37)
Div Paid
0
0
0
(34)
(37)
(40)
Chg in Gross Debt
1
4
10
(1)
(1)
(1)
0
Capital Issues
0
0
0
0
0
(2)
(1)
(2)
0
0
0
Net Financing CF
0
3
9
(36)
(38)
(41)
Currency Adjustments
1
(1)
(1)
0
0
0
Other Financing CF
Chg in Cash
Opg CFPS (sen)
Free CFPS (sen)
61
87
37
19
31
48
11.5
9.2
12.8
15.3
20.5
17.9
19.1
12.7
4.2
8.0
10.1
13.2
45
40
35
30
25
20
15
10
5
0
2010A
2012F
2013F
2014F
Capital Expenditure (-)
Working capital increased
after Padini stocked up
ahead of festivals and sales
promotions, but is
expected to fall as
aggressive inventory
purchases ease
Assumed 40% dividend
payout, implying 5.2%
dividend yield for FY12.
Source: Company, DBS Vickers
Page 14
2011A
HWANGDBS
Company Focus
Padini Holdings
Quarterly / Interim Income Statement (RM m)
FY Jun
Margins Trend
25%
3Q2010
4Q2010
1Q2011
2Q2011
3Q2011
4Q2011
Revenue
139
114
137
142
148
132
Cost of Goods Sold
(72)
(55)
(64)
(72)
(59)
(65)
67
59
72
70
89
67
10%
(43)
(40)
(46)
(49)
(55)
(41)
5%
24
19
26
21
34
26
0%
Other Non Opg (Exp)/Inc
0
0
0
0
0
0
Associates & JV Inc
0
0
0
0
0
0
Net Interest (Exp)/Inc
0
0
0
0
0
0
20%
Exceptional Gain/(Loss)
0
0
0
0
0
0
Pre-tax Profit
24
19
26
20
33
25
Tax
(7)
(7)
(7)
(6)
(9)
(7)
0
0
0
0
0
0
Net Profit
17
12
18
14
24
18
Net profit bef Except.
17
12
18
14
24
18
EBITDA
29
25
32
27
39
33
Revenue Gth (%)
8.6
(18.0)
19.5
3.8
4.3
(10.7)
EBITDA Gth (%)
31.9
(16.4)
29.3
(16.2)
46.4
(16.2)
Opg Profit Gth (%)
42.3
(21.2)
36.7
(19.8)
62.2
(23.4)
Net Profit Gth (%)
49.9
(31.6)
55.4
(21.1)
68.4
(25.9)
Gross Margins (%)
48.4
51.9
52.9
49.4
60.0
50.8
Opg Profit Margins (%)
17.2
12.4
16.6
19.0
14.6
22.8
19.5
10.3
13.4
10.2
16.5
13.7
Minority Interest
Operating Margin %
4Q2011
3Q2011
2Q2011
1Q2011
4Q2010
3Q2010
2Q2010
1Q2010
Operating Profit
4Q2009
Other Oper. (Exp)/Inc
3Q2009
Gross Profit
15%
Net Income Margin %
Product mix changed to
accommodate more fastselling items such as value
items from its Brands Outlets
stores
Growth
Highest gross margin to-date
due to higher sell-through
rates by merchandise sold
during the quarter
Margins
Net Profit Margins (%)
Source: Company, DBS Vickers
HWANGDBS
Page 15
Company Focus
Padini Holdings
Valuation
Peer comparison. Currently, there are no locally listed,
comparable peers for Padini. Local fashion companies such
as Bonia are relatively small in comparison to the group
(US$106m market cap vs US$209m). Globally, Padini’s peers
include international brands such as Giordano, Polo Ralph
Lauren, Zhejiang Semir Garment Co, and GUESS? Inc.
Giordano’s products are comparable to Padini’s ‘Padini
Authentics’ Brand, whereas Zara is comparable with Seed
and Padini brands. However, these companies are
substantially larger than Padini, with over US$500m in
market capitalisation, and Zara is a privately-owned
company. Singapore-based Charles & Keith is Padini’s closest
competitor for handbags, shoes and accessories segment,
but it is not listed on any stock exchange.
At its current price of RM1.00, Padini is trading at 8.1x and
7.4x its CY11 and CY12 EPS respectively. This is at a 50.3%
and 45.6% discount to the regional CY11 and CY12
average of 16.3x and 13.6x. Padini’s price-to-book ratio for
CY12 is 1.8x whereas the peer average is 2.3x (excluding
Ted Baker, which represents an outlier) – undervalued in
comparison.
ROEs higher than most. ROE on Padini’s stock is also
attractive, climbing progressively from 24.1% in FY07 to
29.3% in FY11. We estimate this to be attributed to Padini’s
high asset turnover, increasing EBIT margins as well as a
higher equity multiplier YoY. However, we forecast ROEs to
trend downward due to lower asset turnover and financial
leverage from a larger cash pile and higher reserves
respectively. This is still relatively higher than its substantially
larger peers, with FY12 ROE of 27.9% vs the peer average of
18.0%.
Page 16
Padini is currently trading at below its 5-year average mean
levels of 9.8x forward EPS, although it peaked at 19.8x in
2008. Price-to-book close to its 5-year average of 2.3x
Forward NTA, and we foresee this falling due to a larger
cash pile and a relatively clean balance sheet.
RM1.40 target price. We believe Padini’s position as a
leading retail brand, potential to tap into captive markets via
its Brands Outlet stores and well-managed financials grant it
a premium in valuations. The group also has home-court
advantage in terms of logistics and market knowledge
compared to its international counterparts such as GAP and
Giordano.
Additionally, ETP projects targeted at the tourism and retail
sectors, as well as an increasingly wealthy populace would
allow the company sizeable upside in terms of sales both
from its value and higher end segments. As such, we set a
target price of RM1.40 pegged to 10x CY12 EPS of 13.6 sen,
which is at a 25% discount to its international and regional
counterparts. With such a positive retail climate in store for
Malaysia, Padini could climb as high as its +1 SD PE of 13.3x,
translating to a price of RM1.80.
Potentially higher upside from dividend distribution. Padini
has no set dividend policy, but has historically been paying
out consistent dividends of at least 30% from FY07-FY11.
FY10 was notable as the group paid out 49% of its net
earnings to shareholders, amounting to dividends per share
of 4.5 sen. For FY11, Padini declared a First and Second
Interim Dividend totalling 4.0 sen per share, amounting to c.
RM26.3m or 35% of FY11 earnings. We have thus assumed
a 40% dividend payout in our earnings forecasts, arriving at
FY12 DPS of 5.2 sen per share, FY13 DPS of 5.6 sen per
share and FY14 DPS of 6.0 sen per share. This translates to
dividend yields of 5.2%, 5.6% and 6.0% for FY12F, FY13F
and FY14F respectively. The positive retail climate and
proliferation of transitioning low-to-middle income earners,
if persisting, should provide possibilities for further upside.
HWANGDBS
Company Focus
Padini Holdings
Peer valuation
Company
Currency
Padini Holdings
Price
Mkt Cap
CAGR (%)
ROE
(Local)
(US$)
CY10
PE (x)
CY11
CY12
CY10
PBV (x)
CY11
CY12
09-11
(%)
EV/EBITDA
(x)
MYR
1.00
209
9.6
8.1
7.4
2.6
2.2
1.8
20.3
26.2
3.8
International
RALPH LAUREN CORP
USD
157.39
14,752
28.3
24.2
20.9
4.7
4.5
4.2
17.5
18.8
10.5
GAP INC/THE
USD
19.71
9,668
10.2
12.6
11.2
2.7
3.5
3.6
-12.7
24.8
4.5
GUESS? INC
USD
31.57
3,023
10.5
9.8
8.7
2.9
2.3
1.9
12.6
32.9
4.6
BENETTON GROUP SPA
EUR
4.13
1,011
6.9
9.2
8.6
0.5
0.5
0.5
-20.8
5.0
5.0
TED BAKER PLC
GBp
743.00
520
1926.0
1752.2
1551.4
450.8
400.5
334.1
16.3
24.0
9.0
FRENCH CONNECTION GROUP PLC
GBp
76.25
120
-1757.6
1023.3
823.8
104.0
N/A
N/A
N/A
10.7
3.6
12.8
14.6
13.4
2.7
2.7
2.6
2.6
19.4
6.2
15.4
Average
Regional
ZHEJIANG SEMIR GARMENT CO-A
CNY
49.50
5,233
29.7
23.2
17.2
14.9
4.9
3.9
42.5
21.9
BOSIDENG INTL HLDGS LTD
HKD
2.16
2,191
13.9
12.6
11.8
2.5
2.4
2.3
18.7
19.8
5.8
ESPRIT HOLDINGS LTD
HKD
10.76
1,830
6.0
21.8
12.0
0.9
0.9
0.8
-65.1
2.6
6.3
GIORDANO INTERNATIONAL LTD
HKD
5.78
1,144
16.3
12.4
11.0
3.6
3.4
3.1
57.0
28.6
7.5
NINGBO SHANSHAN CO LTD-A
CNY
16.50
1,074
57.2
40.3
27.9
2.1
2.0
1.9
35.2
5.2
24.3
CHINA GARMENTS CO LTD-A
CNY
9.29
378
155.0
155.0
93.0
9.4
N/A
N/A
N/A
N/A
N/A
GLORIOUS SUN ENTERPRISES LTD
HKD
2.54
352
7.5
6.8
8.1
1.1
1.0
1.0
24.5
15.1
2.5
FJ BENJAMIN HOLDINGS LTD
SGD
0.34
151
18.2
13.7
11.5
1.4
1.4
1.3
66.9
11.8
6.6
16.7
18.0
13.8
4.5
2.3
2.0
25.7
15.0
9.8
Average
Local
BONIA CORP BHD
MYR
1.63
106
7.8
6.2
5.8
1.4
1.1
N/A
48.8
19.0
3.4
VOIR HOLDINGS BHD
MYR
0.51
19
7.9
N/A
N/A
0.8
N/A
N/A
N/A
N/A
N/A
KAMDAR GROUP M BHD
MYR
0.37
23
0.4
N/A
N/A
N/A
N/A
N/A
2.7
2.5
2.3
5.4
N/A
N/A
Average
2.6
6.2
5.8
Total Average
10.7
16.3
13.6
Source: DBS Vickers, Bloomberg
Price to Earnings Ratio
Price to NTA Ratio
(x)
(x)
5.0
20.0
4.0
+2 std dev
16.0
Average
Av erage
2.0
8.0
-1 std dev
1.0
-1 std dev
4.0
+1 std dev
3.0
+1 std dev
12.0
+2 std dev
Oct-11
Apr-11
Jul-11
Jul-10
Oct-10
Jan-11
Jan-10
Apr-10
Jul-09
Oct-09
Jan-09
Apr-09
Oct-08
Jan-08
Apr-08
Jul-08
Jul-07
Oct-07
Jan-07
Apr-07
Jul-11
Oct-11
Jan-11
Apr-11
Oct-10
Jan-10
Apr-10
Jul-10
Oct-09
Jan-09
Apr-09
Jul-09
Oct-08
Apr-08
Jul-08
Oct-07
Jan-08
Apr-07
Jul-07
Jul-06
Oct-06
Jan-07
Jul-06
0.0
0.0
Oct-06
24.0
18.0
Source: DBS Vickers, Bloomberg
HWANGDBS
Page 17
Company Focus
Padini Holdings
This document is published by HWANGDBS Vickers Research Sdn Bhd (“HDBSVR”), a subsidiary of HWANGDBS
Investment Bank Berhad (“HDBS”) and an associate of DBS Vickers Securities Holdings Pte Ltd (“DBSVH”). The research
is based on information obtained from sources believed to be reliable, but we do not make any representation or
warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This
document is prepared for general circulation. Any recommendation contained in this document does not have regard to
the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is
for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees,
who should obtain separate legal or financial advice. HDBSVR accepts no liability whatsoever for any direct or
consequential loss arising from any use of this document or further communication given in relation to this document.
This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. DBS Vickers
Securities Holdings Pte Ltd is a wholly-owned subsidiary of DBS Bank Ltd. DBS Bank Ltd along with its affiliates and/or
persons associated with any of them may from time to time have interests in the securities mentioned in this document.
HDBSVR, HDBS, DBSVH, DBS Bank Ltd, and their associates, their directors, and/or employees may have positions in, and
may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment
banking/corporate advisory and other banking services for these companies. HDBSVR, HDBS, DBSVH, DBS Bank Ltd
and/or other affiliates of DBS Vickers Securities (USA) Inc (“DBSVUSA”), a U.S.-registered broker-dealer, may beneficially
own a total of 1% or more of any class of common equity securities of the subject company mentioned in this document.
HDBSVR, HDBS, DBSVH, DBS Bank Ltd and/or other affiliates of DBSVUSA may, within the past 12 months, have received
compensation and/or within the next 3 months seek to obtain compensation for investment banking services from the
subject company. DBSVUSA does not have its own investment banking or research department, nor has it participated in
any investment banking transaction as a manager or co-manager in the past twelve months. Any US persons wishing to
obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any
security discussed in this document should contact DBSVUSA exclusively. DBS Vickers Securities (UK) Ltd is an authorised
person in the meaning of the Financial Services and Markets Act and is regulated by The Financial Services Authority.
Research distributed in the UK is intended only for institutional clients.
Wong Ming Tek, Head of Research
Published and Printed by
HWANGDBS Vickers Research Sdn Bhd (128540 U)
Suite 26-03, 26th Floor Menara Keck Seng, 203, Jalan Bukit Bintang, 55100 Kuala Lumpur, Malaysia.
Tel.: +603 2711-2222 Fax: +603 2711-2333 email : general@hwangdbsvickers.com.my
Page 18
HWANGDBS