InNature Bhd’s outlook remains challenging due to prolonged weak consumer sentiment may continue to hinder InNature’s sales recovery in sequential quarters, as consumers turn cautious in spending, according to Maybank Investment Bank (Maybank IB).
“Sales momentum will only see an uptick once international tourism improves, a total of 15% of group sales pre-pandemic or consumer spending power increases.
“Challenging operating environment in Vietnam and Cambodia are also likely to keep group earnings suppressed,” it said in its research note today (Dec 22).
Therefore, Maybank IB have a HOLD call with a 35 sen TP based on 16x FY24E PER.
The research house said InNature, which retails and distributes The Body Shop and Natura products in Malaysia, Vietnam and Cambodia, takes sustainability seriously, and scores above-average for ESG.
“The group overall ESG score is 64 (out of 100), which makes its ESG rating above average, under our proprietary ESG scoring methodology.
“As a beauty retailer, the group is not a large contributor to carbon emissions. Adequate data is published on a consistent basis under all ‘E’, ‘S’ and ‘G’ metrics,” it said.
One of the group’s main environmental concern relates to its usage of virgin plastics for its product packaging and the disposal of plastic products after they have been used.
“To address this, the group has committed to converting all its product packaging to recyclable, reusable and compostable ones for better circularity. Note that 100% of Innature products are vegetarian and cruelty-free with no animal testing,” it said.
InNature also scores high on its social and governance sustainability parameters with 80% female director representation on its Board, and 84% female workforce in 2022.
“InNature has the highest number of females in its staff and Board of Directors within our consumer sector coverage,” it said.
