Courts Asia

Courts Asia: Maybank-KE maintains Buy with lower TP of $1.15 from $1.49. House opine that the Sell down on the counter has been overdone, and it still remains a BUY on sound fundamentals. Note that Courts has seen its share price slump 24% in the past three months, vs 15% for its regional peers. Its share price is now 3% below the IPO price. In house view, Courts has been made a punching bag due to weakening consumer sentiment and rising concerns over household debt in ASEAN, particularly among the lower income earners, as investors have ignored its proactive approach to tighten credit approvals since 4QFY3/13. While the macroeconomic conditions paint a grim picture, house remain optimistic that Courts will still be able to deliver stable earnings growth with new stores opening according to schedule. The group’s first store in Sabah opened two weeks ago. Management is standing by its store growth target of 19% YoY for this year, vs. 5% last year, with the bulk of the expansion occurring in Malaysia.