Bonia Corp Bhd's active marketing campaigns were expected to improve brand awareness and strengthen its market position in the fast-moving fashion industry, according to a local research house.

In a report released today (Nov 6), Affin Hwang Investment Bank Bhd (AHIB) said Bonia's affordable luxury positioning acts as a shield against the luxury goods tax.

It has reiterated its "Hold" call with an unchanged 52-week target price of RM1.88. The counter ended Friday's trading at RM1.81.

"We believe the active brand enhancement activities will continue to improve Bonia's brand identity and strengthen its market position in the fast-moving fashion industry," it said.

It said the collaboration with Barbie in September 2023 serves as a stepping stone for Bonia to introduce its ready-to-wear line to the public, capitalising on the timeless appeal of Barbie and aligning the brand with contemporary fashion trends.

Furthermore, it said Bonia strategically engaged a member of Twice, a renowned K-pop group, as its brand ambassador, beginning in January 2024.

"The collaboration with the Twice member is expected to strengthen Bonia's brand presence and market relevance, given Twice's status as an internationally recognised K-pop group, in our view," it said.

On the Bonia new luxury tax effective May 2024, the report noted there was still uncertainty on the implication of such a luxury goods tax on Bonia especially if the tax is broadened to encompass bags and wallets, which contribute to about 80% of Bonia's total revenue.

The Malaysian government plans to implement a high-value goods tax (also known as a luxury goods tax) ranging from 5% to 10% on high-valued items, starting from 1 May 2024.

Under an optimistic scenario, it said Bonia's positioning in the affordable luxury segment may yet result in its exemption from the luxury goods tax. - TMR