Eco-Shop Marketing's Sales Growth Should Improve — Market Talk

About this update from Eco-shop Marketing Berhad

Eco-Shop Marketing's earnings outlook should remain steady as the Malaysian dollar-store sector continues to benefit from consumer downtrading, providing the company with a long runway for expansion, RHB IB analyst Soong Wei Siang says in a note. He expects same-store sales growth to improve from fiscal 4Q as base effects turn more favorable, while margins are likely to stay firm, supported by larger operating scale, favorable foreign exchange and a higher contribution from house-brand products. These factors should help offset higher freight and input costs linked to the Middle East conflict, allowing Eco-Shop to keep prices competitive, he adds. RHB cuts Eco-Shop's target price to 1.80 ringgit from 1.85 ringgit, while maintaining a buy rating on the stock. Shares are 3.1% higher at 1.32 ringgit. ([email protected])

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