Benefits from logistics to materialize
​We reiterate BUY on Poya given its niche position in Taiwan’s retail market and long-term growth outlook. We expect the company will net add 9/8 stores in 3Q/4Q16, to a total of 158 stores at end of this year. The company has already secured locations for 14 of 17 new stores for 2H16. With the launch of its new southern warehouse in 1Q17, we expect Poya’s margin to improve further thanks to improved logistics. Poya’s 2Q16 earnings beat our/Street’s forecasts on higher than expected GM and one-off non-op gains. Hence, we revise up our 2016/17F EPS forecasts by 1%/6%. Our TP of NT$440 implies a 2016/17F P/E of 36x/28x, which we deem justifiable given 25% EPS CAGR in 2016-18F and ~40% ROE. Our 2017F EPS forecast is 5% higher than Bloomberg consensus.
Poya International is engaged in the sale of skin care and cosmetic products, household items, daily utensils, shampoo, shower gel, snacks, stationery, leather goods, ornaments, fashion accessories, underwear, socks, art and crafts and other related products.
Yuanta is a Taiwan-headquartered brokerage with a growing presence in Asia, especially across Greater China. Our team of 140+ provides cutting-edge analysis on key sectors, spread across offices in Taiwan, Hong Kong, Shanghai (A-Share), Seoul and Jakarta. With an ever-expanding coverage universe of 400+ companies, we provide in depth analysis with unique local color to investors. Consistently being voted the Best Investment Consulting Firm in Taiwan in the AsiaMoney broker poll is evidence of our strength. We target providing an extensive range of research, from small, to mid-sized, to large cap. We bring you the big, well-covered names, as well as going off the beaten track to research the less-familiar companies.
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