FJ Benjamin: FYJun11 results largely in line, if forex losses and exceptional items are excluded.
Net profit came in at $13m (+57% yoy) on revenue of $354m (+22% yoy).
Revenue growth was driven by strong consumer demand across all its major markets in SE Asia and North Asia. Sales in Indonesia alone grew by 7% YoY.
The Timepiece segment showed the strongest YoY growth of 34.8% while Fashion and Licensing segments grew by 16.5% and 18.9% YoY rptvly.
Gross margin trended higher to 42.8% (+1.5ppt) with corresponding net margin of 3.6% (+0.8ppt).
FJB has a total of 166 stores as at FYJun11. It plans to increase this to 190 stores in FY12, with new stores mainly in Msia and Indonesia. Capex for FY12 is expected to reach $12.6m, including expenditures to improve existing stores. This is part of its organic growth strategy to expand its brand portfolio and capture market share amidst the uncertainties in the global economy
With regard to possible softening in consumer sentiments in the US and Europe, mgt does not think that the co will be majorly affected as contribution from these regions are still low. However, it cautioned that growth may be slower than expected.
Div of 2cts, translates to 6.3% yield. Stock trades at 13.8x FY11E P/E, 1.4x P/B.
KE maintains Buy, but lowers TP to $0.39 from $0.50, citing global uncertainties which may soften consumer demand.