We attended Courts Asia 3QFY15 Results Briefing on 13 th February.

Key Takeaways:

Indonesia Breakeven Point – Management shared that a low double-digit growth in its existing store would be needed to reach breakeven point for the store. For the country, it guides that more stores are needed to share its central cost. Management guided that Indonesia could turn positive when Courts Megastore BSD City opens, expected in late-2015.

Working Towards Higher Credit Sales In Indonesia – In 3QFY15, credit and earned service charge income accounted for 6% of sales in Indonesia. This is below Singapore’s 16.2% and Malaysia’s 74.8%. Management shared that credit sales mix are expected to fall within Singapore’s and Malaysia’s percentages.

New Online Platform Next Month – Courts Asia is expected to rollout a new online platform featuring a marketplace, similar to Alibaba Group and Amazon.com, Inc. The marketplace would connect its tenants with the consumers and potentially provide a new revenue stream. This rides on the back of a 35% y-y growth in 3QFY15 online sales.

Investment Actions

No stock rating or price target provided, as we do not have coverage on Courts Asia.

Source: Phillip Securities Research - 16 Feb 2015