KUALA LUMPUR: The first quarter (Q1) of financial year 2022 (FY22) is anticipated to be weak for Bonia Corporation Bhd due to prolonged Covid-19 restrictions in the company's key operating countries.
However, Affin Hwang Capital said Bonia provides a good recovery play with the recovery of footfall at malls.
"Furthermore, the potential reopening of international borders in the near term should also be a catalyst for the company moving forward," it said in a note today.
Affin Hwang said over the years, Bonia had seen a net closures of outlets following its three-year consolidation and realignment phase since FY17.
It said in FY21, the company had closed another 52 outlets – nine boutiques and 43 counters - as a result of a weak consumer sentiment regionally.
"As consumer sentiment improves, Bonia is looking at opening new outlets with focus on boutiques format to build its brand equity.
"The management has confirmed a new flagship store at KLCC, expected to open in January 2022," it said.
Affin Hwang has maintained its "Buy" call on Bonia with a higher target price of RM1.10 from 92 sen.
"We think that Bonia's price earnings valuations are undemanding given that consumer retail peers are currently trading at an average 2022 price earnings ratio of 22x.
"We like the group's recent focus on increasing its brand awareness through digital marketing, and efforts to refresh its brands and design collection," it added.