PETALING JAYA: Eco-Shop Marketing Bhd
’s plan to open 70 new stores annually and achieve same-store sales growth (SSSG) of 2% to 3% from financial year 2026 (FY26) to FY28 may boost its revenue by around 12% to 21% per year, according to Maybank Investment Bank Research.
“Our estimated three-year (FY25 to FY28) net profit compound annual growth rate (CAGR) of 20% is premised on a three-year revenue CAGR of 17%, and a lift in pre-tax profit margins to 11% to 12% in FY26 to FY28, on stronger gross profit margins of about 31% (FY25: 28%).
“Our earnings estimates have imputed for 70 new stores per annum.
“We have also assumed for positive but muted SSSG of 2% to 3% from FY26 to FY28, cognisant of gradual sales volume improvements from government stimulus announcements amid stretched spending capabilities of low-income consumers,” the research firm said a report, initiating coverage on the stock.
Maybank Investment Bank Research said stronger consumer disposable income would drive overall retail sales growth in Malaysia, adding that the group stood to benefit from consumer down-trading trends as customer’s leaned towards lower-price point items.
On the downside, it noted the supply disruptions and currency volatility given that the group imports about 69% of its stock keeping units from China and other countries.
It had a “buy” rating and a target price of RM1.45 per share.
At the time of writing, the stock was trading at RM1.30, up 8.33% since the start of the year.
Eco-Shop Marketing is the largest dollar store chain in Malaysia, with an estimated 68% revenue market share as at end-February.
As at end-May, it had 371 stores across Malaysia, including 22 Eco-Plus store formats. The group also has 29 house-brands which made up an average 10,000 different product items, most of which are sourced from end-suppliers in China.
It operates flat-priced and tiered pricing stores under the Eco-Shop and Eco-Plus brands.
