Courts

Courts: Courts celebrated its 40th anniversary last Friday, and we can expect brand building to be pushed ahead despite retail slowdown. MKE feels that Courts’ main concern comes from its lack of opportunity to differentiate itself in electronics retailing. That said, MKE is comforted that it is expanding on other fronts, such as launching a brand-new “World of Wellness” concept to tap into rising health awareness. In Malaysia, Courts is primarily a credit business. And as lending rules becomes relaxed, sales should improve in the coming quarters. Margins should also be enhanced given that interest income is a big profit driver. MKE upgrades to Hold from Sell with TP $0.60