PETALING JAYA: Expansion of stores and product offerings will drive Eco-Shop Marketing Bhd
’s earnings prospects, helped by the stronger ringgit.
RHB Research noted Eco-Shop’s management has indicated the group plans to set up at least 100 new stores in its financial year ending May 31, 2026 (FY26), and improve its merchandise offering consistently by bringing in 300 different products every month as part of its effort to improve footfall and enhancing its shopping experience.
“We foresee the affordable-goods sector continuing its rapid growth by capitalising on the consumer trend for seeking affordability – offering a long runway to Eco-Shop’s growth,” the research house wrote in a report on the retailer of affordable household products following a meeting with its management.
The retailer stated the acceleration in expansion has not led to cannibalisation in sales and it is planning the expansion strategically with around 90% of new stores to be located more than 15km away from an existing store.
RHB Research added that Eco-Shop’s management is also looking to better fit into the Sumbangan Asas Rahmah (Sara) government assistance programme.
Sara sales remain insignificant at 1% to 2% of its total sales at present.
RHB Research has upgraded Eco-Shop to a “buy” from “neutral” with a target price of RM1.81 a share from RM1.63 after raising its FY27 and FY28 earnings forecasts by 3% and 5%, respectively, following an upward revision of its new store-opening assumption.
