Courts Asia has staged a Double bottom consolidation for the past 2 months with bottom seen at 0.71 before rebounding again. Has cleared the 0.800 resistance 2 days back and still manage to stay above it for today. Possible to see more uptick continue to 0.85 then 0.89 on this breakout momentum. As long as 0.800 is a support, we are short term bullish with a stop loss at 0.785 in the case of a downside retracement again.
Maybank KE – 20TH September 2013
Courts Asia - Softening Consumer Sentiment Priced In (Buy, TP $1.15, COURTS SP, Retail)
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� Courts Asia has seen its share price slump 24% in the past three months, vs 15% for its regional peers. Its share price is now 3% below the IPO price.
� Mindful that retail spending may be softening, upcoming subsidy rollbacks in Malaysia impacting consumer discretionary spending and closure of GEM temporarily; we lower our FY3/14F-16F earnings estimates by 8-15% and cut our TP to SGD1.15, pegged at a lower multiple of 14x (previously 16x).
� Despite the cut in TP, we reiterate our BUY call on Courts, based on attractive valuations at 9x FY3/14F PER, proactive measures to tighten credit approvals and positive growth engines in the pipeline.
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