Share
- Padini had 149 domestic outlets with annual lease payments of RM145.8 million at the end of FY2025. This financial year, the company plans to renovate 11 existing stores and open five new outlets, which will increase the total to 182 stores globally, including overseas locations.
KUALA LUMPUR (Jan 8): Padini Holdings Bhd’s (KL:PADINI) rising operating costs may ease following the government’s decision to lower the tax on rental and leasing services, a research house said.
Rental, labour and depreciation charges from refurbishment and expansion are adding to the cost pressures, TA Securities said in a note. The lowered tax on rental would still amount to as much as RM15 million for the year ending June 30, 2026 (FY2026), according to the research house’s estimates.
“Despite ongoing cost pressures, Padini remains cautious about raising prices amid heightened consumer price sensitivity in the current retail environment,” TA Securities said.
On Monday, Prime Minister Datuk Seri Anwar Ibrahim announced a reduction in the rate of service tax on rentals to 6% from 8% and expanded the eligibility for exemptions to cover more small and medium enterprises.
Padini had 149 domestic outlets with annual lease payments of RM145.8 million at the end of FY2025. This financial year, the company plans to renovate 11 existing stores and open five new outlets, which will increase the total to 182 stores globally, including overseas locations.
TA Securities estimates the cost per outlet at between RM3 million and RM5 million, bringing total capital expenditure for FY2026 to RM65 million, noting that depreciation expense is expected to rise 9% as the costs are capitalised into the value of Padini’s assets.
Overall, TA Securities expects a gross profit margin of 39.2% for FY2026. “Moving forward, Padini’s performance is expected to remain promising in FY2026, supported by higher contributions from better-margin segments such as activewear and intellectual property products,” the house said.
TA Securities has a ‘buy’ call on Padini in line with the near-unanimous view on the stock. The consensus’ 12-month target price is at RM2.33, based on the average of nine analysts tracked by Bloomberg. Padini’s last price was RM1.82, valuing the company at RM1.79 billion.
Unlock Malaysia’s shifting industrial map. Track where new housing is emerging as talents converge around I4.0 industrial parks across Peninsular Malaysia. Download the Industrial Special Report now.
