Padini Holdings Bhd(Sept 9, RM3.01)Maintain buy call with a higher target price of RM4: We believe Padini Holdings Bhd is in a sweet spot and its share price is in place for a continuous rerating, driven by new store expansion and resilient sales from its existing stores. Padini Concept Stores (PCS) and Brands Outlets will remain the main engines for the group in driving sales forward. Besides acquiring new stores, sales from existing outlets are expected to remain stable owing to its well-accepted bundling strategy that caters for consumers’ selective spending patterns amid a high-living cost environment. This could benefit Padini in terms of rental payments, which form about 30% of total operating expenses in the future as the group is known for its crowd-puller quality. Furthermore, with its huge layout size, Padini is at an advantage to receive favourable rental rates due to renting promotions.

Source: The Edge Markets September 13, 2016 02:03 UTC