PADINI catch my eye this time

Company Profile
Padini is a well known in apparel industry all over Malaysia. Company basically design, manufacture and sell its own product directly to the end consumers. Through nine brands, company stretch its arm to consumers from all folks of life and sex.

Padini, Padini Authentucs, PDI, P&Co, Seed, Miki, Vincci, Vincci+, Vincci Accessories

Financial Result
For the 1Q12 quarter, company net profit jump 47% to RM26.9m compare to RM18.4m recorded on 1Q11. Net profit hike come on the back of increase revenue to 178.1m from 136.6m on same quarter preceding year.
Ongoing expansion in gross floor area has contribute to increase revenue. During last 12 months, 4 Brands Outlet stores and 2 Padini Concept Store has been opened.

The impact from the Brands Outlet revenues was particularly significant as sales of our own merchandise during the quarter under review rose 85.7% year-on-year. While the sales of our own products from the Brands Outlet stores made up about 11% of the total revenues of Q1 of the previous financial year, this figure had increased to more than 15% for Q1 this year.

 Hari Raya Aidilfitri and Merdeka Day sales promotion and events has also contribute to the revenue.

Technical Outlook 
 Padini share price has been climbing steadily since bottoming during the end of September. On 18/10/11, MA(14d) cross over MA(50d) and stay above. Today, looks like MA(50d) will be touching MA(100d). Surely, there is a buying momentum on the way. Share price broke above 9 months downtrend is a positive sign too.

Stock Valuation
For the last twelve months, company recorded EPS $0.127. With current share price $1.11, its trading at PE multiple of 8.7x. With this multiple, it is deem attractive.

Overall
Padini is a popular brand in apparel industry in Malaysia. From my record, company EPS has been growing at about 20% annually. ROE for the past 5 years, has shows me that company has been run efficiently. Management tend to bring better return to the shareholder.

The only thing i cannot understand is Padini should deserve a higher PE valuation, maybe 12x? Know what, none of the company in this sector have a double digit PE valuation. Take a look at the company's prospect outlook

Commentary on Prospect

The Group has started off its financial year with yet another creditable performance. While we expect the next quarter to be exceptionally strong in view of the Christmas season and the expected early shopping for the 2012 Chinese New Year season, we are also aware of the numerous economic problems that plague the world today, and how this may finally impact upon the Malaysian economy in general and the retail industry in particular. Nevertheless, given our experience in coping with economic downturns, we are also confident of having another profitable year for 2012.