Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD
Research House: HWANGDBS
Company Name: PARKSON HOLDINGS BHD
Research House: HWANGDBS
HwangDBS Vickers Research has maintained "buy" recommendation on Parkson Holdings Bhd and has raised its realisable net asset value-based target price to RM6.50 from RM6 earlier.
The research house said it viewed positively Parkson's expansion to Indonesia by tapping local expertise, which would combine its retail operations in Malaysia and Vietnam, with an existing chain in Indonesia.
"Based on the preliminary numbers, we estimate the Indonesian operations, which will add eight outlets to the group's existing 89 stores network, will contribute incremental revenue to RM347 million and RM12.9 million net profit in FY12," it said in a research note.
It said while the immediate net impact would probably be "neutral" after considering its diluted stakes in Malaysia and Vietnam, earnings could be significant in the long run as it tapped on the huge demand from 240 millionpopulation in Indonesia.
Meanwhile, MIDF Research said it was maintaining a "neutral" call on Parkson, with an unchanged RM5.90 target price, despite the Indonesian deal, as it was cautious over China and Vietnam's economies going forward.
It said Parkson would benefit directly from the immediate penetration into the Indonesian retail market by controlling existing PT Tozy Bintang Sentosa Group's five Centro Lifestyle Department Stores and one Kem Chicks Supermarket.
"Indonesia's departmental store sales were valued at US$3 billion in calendar year 2010, growing at five year compound annual growth rate (CAGR) of 9.2 per cent year-on-year and the currency risk is lower compared to Vietnam.
Meanwhile, MIDF Research said it expected Indonesia's business to contribute less than three per cent to Parkson's bottom line, while China's business was still dominating, accounting for 88 to 90 per cent of its revenue.
However, Indonesia's contribution might surpass Vietnam's in the near-term, it said, adding that the proposed collaboration was expected to be completed in the second half of this year. -- Bernama
The research house said it viewed positively Parkson's expansion to Indonesia by tapping local expertise, which would combine its retail operations in Malaysia and Vietnam, with an existing chain in Indonesia.
"Based on the preliminary numbers, we estimate the Indonesian operations, which will add eight outlets to the group's existing 89 stores network, will contribute incremental revenue to RM347 million and RM12.9 million net profit in FY12," it said in a research note.
It said while the immediate net impact would probably be "neutral" after considering its diluted stakes in Malaysia and Vietnam, earnings could be significant in the long run as it tapped on the huge demand from 240 millionpopulation in Indonesia.
Meanwhile, MIDF Research said it was maintaining a "neutral" call on Parkson, with an unchanged RM5.90 target price, despite the Indonesian deal, as it was cautious over China and Vietnam's economies going forward.
It said Parkson would benefit directly from the immediate penetration into the Indonesian retail market by controlling existing PT Tozy Bintang Sentosa Group's five Centro Lifestyle Department Stores and one Kem Chicks Supermarket.
"Indonesia's departmental store sales were valued at US$3 billion in calendar year 2010, growing at five year compound annual growth rate (CAGR) of 9.2 per cent year-on-year and the currency risk is lower compared to Vietnam.
Meanwhile, MIDF Research said it expected Indonesia's business to contribute less than three per cent to Parkson's bottom line, while China's business was still dominating, accounting for 88 to 90 per cent of its revenue.
However, Indonesia's contribution might surpass Vietnam's in the near-term, it said, adding that the proposed collaboration was expected to be completed in the second half of this year. -- Bernama
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