PETALING JAYA: Inventory replenishment, lower storage costs, and selective price increases are expected to support Synergy House Bhd
’s operational recovery in the coming quarters, though a sustained earnings turnaround hinges on stronger sales execution and margin improvement, says BIMB Research.
In a note to clients, the research house said it came away from the group’s second- quarter (2Q26) briefing more constructive on its recovery prospects, while remaining cautious of persisting margin pressures.
Following a weak 2Q26 due partly to inventory availability challenges, with 20% to 30% of key business-to-consumer (B2C) stock-keeping units out of stock during the quarter, Synergy House’s management has indicated that replenishment efforts are now underway.
Management expects stock availability to improve progressively in the coming months, with B2C sales momentum strengthening in the second half of this year (2H26) as inventory constraints lessen, BIMB Research said.
Additionally, storage costs have begun to normalise after inventory clearance initiatives were implemented in 1H26.
June storage expenses were said to be about 20% lower than earlier levels, with the group anticipating further cost moderation in 3Q26 as inventory turnover improves.
“While these developments are encouraging, we believe sustained improvement in sales execution, consumer demand and margin recovery remains necessary to support,” the research house noted.
Meanwhile, it said the group’s selective pricing strategy, which was implemented from August 2026 and met with promising initial customer response, should also provide additional margin support.
The pricing initiatives, together with ongoing inventory optimisation and cost-control measures, could help offset tariff and foreign-exchange or forex- related pressures, though a challenging operating environment remains, it said.
Tariffs, forex movements, and soft furniture demand continue to cloud near-term visibility, the research house added.
BIMB Research has maintained a “hold” rating on the stock with an unchanged target price of 19 sen.
