Joining the billion-ringgit club. India's on-again, off-again cotton
export ban is a small hiccup which has not affected Padini. We maintain
our Buy call and TP of RM1.70 based on 12x CY12 PER. The group has
evolved into a stock with a market cap of over RM1b compared to just
RM690m when we initiated coverage in July 2011. The 12-month average
daily trading volume has also improved to 1.2m shares vs. just 0.7m in
July 2011. Trading at 11.2x calendarised 2012 earnings, we expect its
valuation gap vis-à-vis peers to continue narrowing.
Maybank Research 13 March 2012
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