(BUY, S$0.32, TP S$0.44)
4QFY11 revenue growth supported by strong consumer demand. FJB’s 4QFY11 PATMI of S$2.3m (-23.7% YoY) was in line with our estimates. This was on the back of revenue growth of 25.2% to S$88.8m. PATMI was dragged down by higher A&P expenses (+54.7% YoY) as FJB rolled out more campaigns to ride on the rising consumer sentiment to boost sales. Despite the economic slowdown in US and Europe, its RAOUL label continues to receive healthy order levels. Our DCF-based TP has been lowered to S$0.44 (from S$0.52) as management has more aggressive plans to have at least 20 new outlets in the region in FY12 (we had initially projected two new outlets, net of any closures). We believe FJB would be able to continue to grow in the next few quarters, supported by its strong brand portfolio and Asian retail network. The recent dip in share price presents a good opportunity to pick up the stock. We are estimating earnings of S$16.0m in FY12. Maintain BUY for a company with steady dividends.
Positive trend continues for RAOUL. Although uncertainty hangs over the US and Europe
economies and consumer sentiment, Asia remains an attractive destination for fashion labels,
amid rising Asian consumerism. Consumer sentiments across FJB’s key markets are still
healthy, though management is cautiously optimistic. Having come from a small base, FJB
continues to see healthy demand for its RAOUL products in US and Europe. It is receiving reorders from its US customers and will be establishing a showroom in Milan to cater to customers in Europe. Contribution from RAOUL is still small and management expects the label to breakeven in 18 months.
Indonesia market expected to be a growth driver. Consumer spending in Indonesia remains
strong, supported by its healthy economy. FJB plans to open 12 new stores there in FY12. FJB
recently entered into collaboration with PT Sukses in Indonesia, to explore opportunities in
Indonesia relating to the manufacturing, retail, distribution and marketing of fashion products.
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