KUALA LUMPUR (Feb 20): Rakuten Trade Research has set a “buy” call on Main Market debutante InNature Bhd following the company's new business strategy to drive sales growth.

The company that is best known for its retail brand “The Body Shop” is leveraging its network in Malaysia to drive same-store sales growth via an omni-channel strategy.

“At present, more than 85% of the sales are derived from Malaysia and the another 15% from Vietnam. BodyShop is well-positioned in the 'masstige' market serving mass market with affordable premium products supported by strong customer base both in Malaysia and Vietnam,” it said in a note today.

The research house noted that Body Shop’s “no animal testing” resonates well with naturally inspired products that attracts loyal following where members contribute more than 60% of the total sales.

InNature is expected to use proceeds from the initial public offering of RM34.5 million for capital expenditure covering business in Malaysia, Vietnam and Cambodia.

Meanwhile, 11.3% of the funds raised will be allocated for business development costs for Natura in Malaysia and 7.5% is for working capital.

Rakuten set a target price of RM0.81 for the company.

At 11.45am, shares of InNature rose six sen to 70 sen with 107.26 million shares transacted.