Courts Asia shares as attractive as its storefront now

SINGAPORE (Sept 19): Courts Asia just posted its highest quarterly earnings in three years, a jump of 56% against 1QFY16 to June, yet its shares continue to trade at 7.8 times FY17 earnings, below its historical 10.2 times, and even lower than its peer valuation of 22.9 times earnings.

CIMB equity research analyst Jonathan Seow views the group as a “turnaround story” but notes that the market “has yet to price in a recovery”.

Nonetheless, Seow has maintained his “buy” rating for the electronics and furniture retailer, with a higher target price of 53 cents, from 50 cents previously, adding that the retailer has been improving its productivity through the subleasing of floor space to complementary brands, and building a modular and flexible store format.

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