SABINA Rises as High as 3.5% as Good Strategy-Management Leads to Higher Profit in 1Q21

The share price of SABINA rose as much as ฿0.70/share or 3.54% to Bt20.50 before dropping to Bt20.00 as of 11:08 local time in Thailand on May 14, 2021.

 

SABINA disclosed its 1Q21 performance, posting 672.3 million baht of total revenue, a 1.4% YOY decrease from 681.6 million baht, while net profit in the first three months of this year is 78.4 million baht, an 11.3% YoY increase from 70.4 million baht. Sales through the non-store retailing channel were up by 45.5%.

The key factor for this surge of net profit in spite of the impact from the second wave of COVID-19 is SABINA’s shift in sales strategy to proactively approach customers combined with efficient cost management. Admittedly, the second half of the year seems extremely challenging, but SABINA still believes that its year-end revenue goal for this year will be record-breaking.

 

Mr. Bunchai Punturaumporn, CEO of Sabina Public Company Limited (SABINA), manufacturer and distributor of SABINA lingerie, revealed that although the 1Q21 revenue declined marginally by about 1.4% YoY, SABINA still managed to boost its profit by up to 11.3% YoY despite the fact that Q1 saw the second outbreak of COVID-19 following the Samut Sakhon cluster. The factors conducive to SABINA’s rise in net profit were the adjusted sales strategy and the more efficient cost management.

 

“In this year’s first quarter, our revenue fell slightly. January sales were affected by the second wave of COVID-19 but we modified our sales strategy by penetrating communities that still have spending stimulated by the government’s “Kon La Krueng” co-payment scheme while other provinces were scarcely affected by the second outbreak. As a result, our sales picked up during the period from February to March. At the same time, SABINA offered more specially priced products in response to the economic slowdown because we wanted consumers to be able to access quality products at reasonable prices. We also enhanced the efficiency of our work systems and adopted a new model of marketing budget management, causing SABINA’s net profit to soar by 11.3% YoY and 11.7% QoQ with the gross profit margin in 1Q21 at 47.6%,” said Mr. Bunchai.

 

In this regard, revenue from the non-store retailing (NSR) channel in 1Q21 continued to expand and enjoyed a 45.5% growth while revenue from the retail channel dropped by 9.3%, revenue from exporting to CLMV countries (Cambodia, Laos, Myanmar, and Vietnam) climbed by 4%, and revenue from OEM orders from the UK and Europe contracted by 14.3%. When comparing the proportion of revenue from these four distribution channels with the total revenue, it was found that in 1Q21, the proportion of revenue from the retail channel to the total revenue decreased from 69% to 66% while the proportion of revenue from the NSR channel increased from 19% to 22%, export increased from 3% to 4%, and OEM decreased from 9% to 8%.

 

SABINA’s CEO added that based on the forecast prior to the third outbreak of COVID-19 in April, SABINA predicts that this year’s sales will surpass last year’s, meaning that SABINA could reach a record-high revenue of over 3.4 million baht. It is quite possible that SABINA will reach its target owing to the expedited vaccination of the population which would speed up the rebound of consumer confidence while in Q2/2021, overall performance is likely to improve YOY. Given the speediness and the adaption to new market trends where ideas are not limited to merely what customers want but extending to what customers are concerned about during the pandemic, SABINA met customers’ needs by launching a campaign with Southeast Insurance Public Company Limited to sell lingerie that comes with a free COVID-19 insurance with extra protection covering allergic reaction or effects from vaccination. The campaign received overwhelmingly positive feedback.

“The second half of the year, meaning in Q3 and Q4, will be even tougher for business. Nevertheless, we anticipate that consumers will do more shopping after being cooped up and cautious about going outside. If everything goes well and no fourth or fifth COVID-19 outbreak hits us, we believe that once the vaccines have been evenly distributed, consumers will feel more assured and finally come out to spend money, thus enabling SABINA to take another step toward passing the set revenue milestone,” said Mr. Bunchai.