Bonia- benefiting from increased consumer spending

Result Update

For QE31/3/2013, Bonia's net profit increased by 73% q-o-q or 95% y-o-y to RM13 million while revenue was mixed - down 8% q-o-q but rose 12% y-o-y to RM154 million.

Despite the q-o-q drop in revenue, the bottom-line improved q-o-q due to lower promotional activities & reduced renovation & set-up costs incurred. The company opened 5 counters in Indonesia & 3 boutiques in Vietnam in QE31/3/2013. In QE31/12/2012, the company opened 5 boutiques in Vietnam and 1 in Indonesia.


Table: Bonia's last 8 quarterly results


Chart 1: Bonia's last 17 quarterly results

Valuation

Bonia (closed at RM1.99 on May 23) is now trading at a PE of 11 times (based on last 4 quarters' EPS of 18.4 sen). This compared favorably to Padini which trades at a PE of 17 times (based on share price of RM2.13 on May 23 and an EPS of 12.8 sen for the 4 quarters ended 31/12/2012.

Technical Outlook

As noted in my earlier post, Bonia is in an uptrend line, with support at RM1.75. Its immediate support is the 10-week SMA line at RM1.98. The intermediate downtrend line resistance at RM2.40 should cap the share price for a while.


Chart 2: MISC's weekly chart as at Mar 23, 2013 (Source: Quickcharts)

Conclusion

Based on improved financial performance, attractive valuation & positive technical outlook, Bonia could be a good stock for long-term investment.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Bonia.