Friday, 16 June 2017

(The Star) New store openings to support Bison’s earnings growth

PETALING JAYA: Ongoing store openings as well as the completion of Bison Consolidated Bhd’s new food processing and distribution facility by end FY18 are expected to support its earnings growth, moving forward.

CIMB Research noted that the group has opened 31 stores as at April 2017, bringing its total to 325 stores.

It said the group was on track to meet its target of opening 70 stores a year by the end of FY18.

The group is currently present in most states in Malaysia, with about 80% of its stores in the Klang Valley and Selangor and the majority located in shopping malls and high-foot traffic retail locations.

“We also gather that the progress of its new food processing facility is on track and management is confident that it will be operational by end-FY18.

“With this, Bison would be able to distribute its own-brand fresh food products line, which we believe could help to drive up profitability,” it said in a note.

The research house downgraded the stock to “hold” from “add” previously, with a higher target price of RM2.28.

Maybank Investment Bank (Maybank IB) Research also downgraded the stock to “hold” from “buy” previously, with a target price of RM2.45, following its share price gain of 40% year to date.

“We believe that the stock is fairly valued for now,” it said in a note.