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Poya Co net income rises 35.7% to NT$279m

Poya Co net income rises 35.7% to NT$279m

TAIPEI: Poya Co on Tuesday reported third-quarter results which were in line with market expectations.

Net income rose 35.7 percent to NT$279 million (US$8.5 million), or NT$2.93 per share, from the previous quarter, while sales grew 7.3 percent quarter-on-quarter to NT$2.76 billion.

Poya, which as of the end of last quarter operates 122 stores selling cosmetics and beauty products, personal goods, lingerie, socks and household groceries, has announced plans to expand to 131 stores before the end of this year.

The retailer has also remodeled 12 stores into new-generation outlets in the past quarter, while cutting the number of older-format stores to 11, or 9 percent of total stores.

The company is planning to roll out 27 additional stores next year, which analysts expect will continue to propel sales growth this year and through 2017.

Analysts are also positive on the company’s new central warehouse facilities, which are expected to improve profit margins and help contain operating costs.

Poya shares gained 1.09 percent to NT$370 in Taipei trading yesterday.

Yuanta Securities Investment Consulting Co issued a “buy” rating for Poya shares, while Malaysia-based CIMB Securities Ltd advised investors to “hold.”

“Although the stock is not cheap … we deem the company deserving of a premium, given its niche competitive position in the domestic retail market, high dividend payout ratio and its capable management team,” Yuanta analyst Livia Wu said in a client note.

CIMB Securities Ltd analyst Jack Lin said that Poya’s 0.3 percent quarter-on-quarter decline in single-store-sales-growth (SSSG) last quarter was disappointing, and has slashed his SSSG forecast for this year, from 5.2 percent to 3.6 percent.