bullish
ILM: Leader in Home Furnishing Has More to Give
SUMMARY
We initiate coverage on ILM with a BUY recommendation based on a target price of Bt15.20, implying an upside of 13% from the current price. We derive our target price from a DCF-based valuation using a WACC of 6.8% and a terminal growth rate of 2%.
Investment thesis:
- Customized furniture brand Younique captures modern customer demand
- Improved inventory management leads to significant cost cut
- Overseas expansion provide future growth opportunities
Risks: Slowdown in Thai consumer spending, increased competition puts pressure on margins, worsening inventory management, and disruptions in supply chain.
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