HwangDBS Vickers Research Sdn Bhd has tweaked up Parkson Holdings Bhd's 2012-2014 financial earnings by between one
per cent and five per cent.
The research house said it favoured the retailer, as it was a proxy to the rise of consumer spending, tapping on the huge long-term growth potential in China and South East Asia.
From a valuation perspective, Parkson Holdings' one-year forward rolling price earnings ratio has dropped 11.4 times, below its mean of 14.4 times, however, still higher than its record low of 6.3 times.
"Its share price would be RM5.91 if it reverts to its historical mean, and could fall to RM2.59 at trough price earnings ratio.
"More interestingly, the stock is now trading close to its historical low price-to-book-value multiple, implying relatively limited downside to RM3.73, compared with the upside potential, to RM6.81," it said in a research note today.
HwangDBS Vickers maintained its "buy" call on Parkson Holdings with an upgraded target price of RM5.40, from the previous RM5.30, which implied a total potential return of 19.1 per cent. -- Bernama
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