PETALING JAYA: PublicInvestment Research has accorded a fair value of 77 sen for Innature Bhd’s initial public offering (IPO) based on a 15 times price-to-earnings multiple to its financial year 2020 forecast earnings per share of 5.1 sen, excluding the listing cost.
The offer price is 68 sen and the closing application date was yesterday.
InNature retails and distributes The Body Shop (TBS) brand of products through its subsidiaries, which hold the TBS franchises in West Malaysia, Sabah and Labuan; Vietnam; and Cambodia.
As at Dec 31,2019, InNature had 124 points-of-sale, besides having an online presence.
The group’s business garners customers from all walks of life, with the majority of its customers being urban, young and women. In collaboration with Natura Cosmeticos SA, InNature also recently introduced the Natura beauty brand in Malaysia to expand its brand port folio and strengthen its market share leadership in the natural sector of the beauty industry.
Apart from developing a new business with the Natura brand in Malaysia, InNature intends to drive TBS same-store sales growth in Malaysia while achieving greater market penetration in Vietnam and Cambodia post-IPO.
“The IPO is expected to raise RM50.4mil from the issuance of 74.1 million new shares. Besides utilising 68.5% of the proceeds for capital expenditure, 11.3% is allocated for new business development, earmarking future growth, ” it said.
PublicInvest Research said InNature’s growth would be dependent on TBS same-store sales growth in Malaysia; TBS retail store network expansion and TBS brand awareness building in Vietnam; TBS expansion in Cambodia; and the development of new businesses with the Natura brand in Malaysia.
InNature’s competitive strengths include being a leading mono-brand beauty retailer in Malaysia; having a strong track record and long-term working relationship with The Body Shop International Ltd; TBS being a well-established global brand; having 100% vegetarian products, which are consumers’ preference on the growing trend for natural beauty products; having “masstige” positioning; and having a strong base of loyal customers.
Key drivers may include a growing population and growth of disposable income; increasing spending power by female consumers; the growth of the online market for cosmetics and personal care products; growing demand for natural-based ethically-sourced products and positive ethical consumerism behaviour.