Bonia leverages on strong same stores sales for growth
KUCHING: Bonia Corporation Bhd’s (Bonia) strong same store sales (SSS) is expected to continue supported by its in-house brands and co-owned brands which came up regularly with new products and designs.
AmResearch Sdn Bhd (AmResearch) in a report said Bonia’s growth catalyst will be led by its own brands of consumer apparels and products as well as those jointly-owned to boost sales.
The research firm said Bonia’s premium brands such as Bonia and Braun Buffel are positioned as the key revenue driver given their strong reception and franchise value, supported by healthy earnings margins due to their products’ premium pricing.
AmResearch observed that the group is expanding its third manufacturing plant in Malacca to boost capacity by 50 pe cent through the production of addtional 20,000 of bags per annum at its new factory.
In the meantime, Bonia’s two other existing factories in Malacca are running at full capacity and both factories are manufacturing 40,000 bags per year in total. AmResearch added. It said 90 per cent of the raw materials for Bonia’s handbags are imported from Italy but manufactured locally.
Addtionally, the company is constantly exploring new markets within Asia and countries such as Singapore, Vietnam and Indonesia have remained its key target markets.
Bonia could leverage on its premium brands such as Sembonia, Carlo Rino and co-owned brand Braun Buffel for instance for overseas growth.
Besides that, the research firm noted Bonia could potentially spin off one of its business units to unlock the value of the company and raise its business profile to derive more value to its shareholders.
On another note, AmResearch observed that Bonia’s leather products is operating in a monopolistic environment where those products contributed 61 per cent to the company’s turnover.
Bonia’s competitors include international brands such as Furla and Coach whose products are priced some 40 to 50 per cent higher than those under Bonia’s premium brands.
This means that Bonia’s products are priced more competitive and lower than those by its competitors.