Friday, May 17, 2013

Parkson Holdings Berhad

In the recent bull run of KLSE, investor may find it harder and harder to get a good stock to invest as most of the blue chip seem trading at their all time high level or in a very high valuation. But during this bull run, we found that Parkson Holdings Berhad (PHB) is in the downtrend for the pass 2 days.

As 85% earning of PHB is come from its Parkson Retail Group Limited (PRG) listed in Hong Kong, the performance of PRG will always reflect on the PHB share price.

Last $3.76 HKD
Change Today -0.35 / -8.52%
Volume 26.0M
As of 4:01 AM 05/16/13 All times are local (Market data is delayed by at least 15 minutes).

Parkson Retail Group Ltd (3368) Snapshot

Previous Close
Day High
Day Low
52 Week High
05/29/12 - $8.38
52 Week Low
05/16/13 - $3.74
Market Cap
Average Volume 10 Days
Shares Outstanding
Dividend Yield
Current Stock Chart for PARKSON RETAIL GROUP LTD (3368)

Parkson Holdings - PRG’s SSSG suffers 2.8% contraction HOLD
Author: kiasutrader   |   Publish date: Thu, 16 May 11:25 

- We re-affirm our HOLD on Parkson Holdings Bhd (PHB), with an unchanged fair value of RM4.43/share, based on a sum-of-parts valuation for FY14F.

- Parkson Retail Group (PRG) released its 1QFY13 (December) results. Earnings dipped 37% YoY, but grew 27% QoQ. Meanwhile, PHB’s results are scheduled for release on 27 May.

- Gross sales proceeds increased by 2.1% YoY. Concessionaire sales remained the key contributor, accounting for 90% of total merchandise sales. Direct sales contributed the remaining 10%.

- Fashion & Apparel and the Cosmetic & Accessories categories continued to command the bulk of the merchandising mix of 47% and 42%, respectively.

- As expected, same-store-sales growth (SSSG) declined 2.8% YoY vs. 4QFY12’s +0.4%. The merchandise gross margin further compressed by 0.7ppt YoY to 17.3% in 1QFY13 vs. 4QY12’s 18.1%.

- This, we believe is caused by:- (1) Slowdown in China’s economic growth, which in turn affected consumer sentiment; and (2) Intensifying competition within the retail landscape, with competitors such as Golden Eagle and Intime.
- On the expansion front, stores in Panzhihua, Datong and Chongqing 4 are targeted to be opened in 2QCY13. So far, only Hefei 3 has been opened - one out of the eight pipelines of stores for CY13.
- In our earnings forecast for PHB (year end June), we continue to assume a contraction of SSSG of 2% for PRG. By historical standard, PRG contributes nearly 75% to PHB’s EBIT. PHB’s earnings outlook continues to be unexciting as China remains the dampener in the near term. We opine that any recovery in PRG’s SSSG will remain bumpy and any rebound would be at a gradual pace.
- Trading at 14x PE of FY14F, valuation appears overvalued in light of PHB’s lacklustre earnings growth, prompted by PRG’s decelerating SSSG. PHB is trading at a 57% discount to local peer, Aeon Co (M) Bhd (AEON Mk Equity, Non-rated), that is trading at 22x consensus earnings.
Source: AmeSecurities

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