RHB Investment Bank Bhd (RHB Research) has maintained its BUY call on Eco-Shop Marketing Bhd with an unchanged target price of RM1.80, implying 36% upside, with analysts saying the group is on track for a steady same-store sales growth recovery supported by improving consumer sentiment, disciplined cost control and an aggressive store expansion pipeline that underpins a three-year earnings growth outlook.
RHB Research said Eco-Shop’s same-store sales growth trend is showing signs of recovery driven by higher transaction counts, normalised supply conditions and a favourable low base following earlier price adjustments. Analysts noted that softer consumer sentiment linked to inflation concerns is also reinforcing Eco-Shop’s value-for-money positioning, which continues to resonate with price-sensitive shoppers across Malaysia.
The research house said the group remains on track to open 100 new outlets in FY26 with 65 already opened in the first nine months, while refurbishment programmes are also delivering results with upgraded stores recording sales uplifts of more than 10%. It added that this expansion momentum is expected to continue into FY27, supporting sustained volume growth.
On costs, RHB Research highlighted that management expects an additional RM1.5 million per month impact arising from higher input costs and freight expenses linked to Middle East tensions, particularly affecting plastic-related products. However, analysts said Eco-Shop is expected to maintain its pricing strategy, which could strengthen its competitive position as peers pass on higher costs to consumers.
The research house maintained its forecasts ahead of FY26 results on July 22, noting that implied fourth quarter net profit of RM67 million, representing 18% year-on-year growth, is likely to be met. It added that stable operating expenses, SKU optimisation and growing house brand contribution should help cushion margin pressure, supporting an estimated 19% earnings compound annual growth rate over the next three years.
As of 11.49 am, the stock price rises 3.03% to RM1.36.
