New JV in Entertainment Attractions

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: MIDF

Price Call: HOLD

Target Price: 2.44

Lowered FY15 Earnings

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: TA

Price Call: SELL

Target Price: 2.30

Venturing into F&B in China

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: TA

Price Call: SELL

Target Price: 2.72

PARKSON - Disposing KL Festival Mall

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: TA

Price Call: SELL

Target Price: 2.42

PARKSON - Margin Compression, Near Term Concern

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: TA

Price Call: HOLD

Target Price: 3.98

Parkson - Chinas weakness to persist

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: MIDF

Price Call: SELL

Target Price: 2.63

Parkson - Expect future payoff from continued expansions in China

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: MIDF

Price Call: HOLD

Target Price: 4.00

Parkson's China woes expected to persist

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: MIDF

Price Call: HOLD

Target Price: 4.00

Parkson - Corporate Update

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: MIDF

Price Call: HOLD

Target Price: 4.50

Affin cuts rating on Parkson Holdings

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: AFFIN

Price Call: BUY

Target Price: 4.84

Affin Investment Bank cut its rating on Parkson Holdings Bhd to 'reduce' from 'buy', following its retail unit's disappointing earnings in the first nine months of the year due to uncertain operating conditions in China.

Parkson Retail Group's surprising weaker year-to-date same-store-sales growth was caused by a slowdown in China's consumer spending and gross domestic product, the research house said on Monday.

Parkson's third-quarter core net profit plunged 42 percent year-on-year because of losses at new stores, rental hikes and high costs in its e-commerce segment, Affin added.

Affin lowered its target price on Parkson Holdings to RM4.84 from RM5.35.

As of 0154 GMT, Parkson shares were down 3.2 per cent, underperforming the Malaysian benchmark index which dropped 0.2 percent. - Reuters

RHB ups Parkson's fair value

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: RHB

Price Call: BUY

Target Price: 5.32

RHB Research raised its fair value estimate on shares of Parkson Holdings Bhd to RM5.32 from RM4.90, citing the retailer's expansion plans.

Parkson shares were flat at RM5.20, while the benchmark composite index was down 0.07 percent at 1654.94.

Parkson's operations in China will continue to be a key driver for the company's prospects, with 8 to 10 stores opening annually in smaller cities, RHB said in a note on Monday.

The company's operations in Indonesia is growing steadily and it plans to open stores in Cambodia and Myanmar in 2013, the brokerage said. In Malaysia, the firm's wholly-owned shopping mall, KL Festival City, contributed to operating profit positively in 2012, RHB said.

However, Parkson's shares could be hurt by a slowdown in consumer spending in China and if expenses on new stores and malls exceed expectations, it added. -- Reuters

HwangDBS keeps 'hold' call on Parkson

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: HWANGDBS

Price Call: HOLD

Target Price: 4.90

Parkson Holdings Bhd's (PHB) share price rose one sen to RM4.68 as at 12.16pm today, on news that it has acquired six hectares of land in Melaka for RM98 million.

The company said the proposed acquisition is expected to be completed by December this year and plans to develop a shopping mall on the land.

HwangDBS Vickers Research has maintained a "hold" call on PHB's shares with a target price of RM4.90.

It said it does not expect this new acquisition to impact PHB's earnings in the near term as it will take time for PHB to construct the shopping mall.

"Overall, we view this deal positively as it jives with management's long-term objective of building and owning its portfolio of investment properties and eventually setting up a retail REIT," HwangDBS said in its research note today.
-- Bernama

PARKSON - Earnings supported by PRA

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: HWANGDBS

Price Call: BUY

Target Price: 6.20

Parkson Holdings; Buy; RM5.58
Price Target: RM6.20 (Prev RM6.55); PKS MK

Seasonally stronger Dec11 quarter produces RM106m earnings, within our expectation. Malaysian ops offset China's disappointing earnings. Maintain Buy with RNAV-based TP of RM6.20.

Source: HwangDBS Research 28 Feb 2012

Parkson Holdings - Healthy retail cheer at half time

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: AMMB

Price Call: BUY

Target Price: 6.84

Parkson Holdings Bhd (PHB) posted a higher net profit of RM106milfor 2Q (YoY: 17%), bringing 1H earnings to RM196mil. Interim earnings made up45% of our forecast and 46% of street estimates. 

We consider the half-time results to be broadly in line withexpectations as we expect earnings to be predominantly backloaded due to theChinese New Year festivity and supportive consumer sentiment (June FY-end).

PHB recorded a 15% rise in net profit for 1HFY12 as turnoverjumped a higher 21% YoY. The benefits of higher gross sales proceeds waspartially offset by lower operating margin which fell 2.7ppts YoY to 23% due tolower gross margin, educational & city development surcharge and new storeopenings. 

We understand the same-store-sales growth (SSSG) of Parksonstores in Malaysia was a strong 12%, ahead of management's guidance of 8%-10%.SSSG of Parkson China came in at 10%, but management is comfortable maintainingits target of mid-to-high single-digit growth for FY12F in anticipation of amoderation ahead. As it is, retail sales growth in China for 4Q2011 was flat at15.8% YoY, versus 3Q2011's 17%.

Meanwhile, Parkson Indonesia and Parkson Vietnam performedwell with SSSG of 10% and 16%, well within management expectations of 8%-10%and 15%-20%, respectively.  The groupopened one new Parkson store each in Malaysia, Indonesia and Vietnam in 2QFY2(KL Festival City in KL, Summarecon Mal Serpong in Tangerang, Indonesia andParkson Landmark 72 in Hanoi, Vietnam). Management is maintaining its guidanceof a total of 8-10 additional stores in China, 2 in Malaysia, 2-3 in Vietnam and4-5 in Indonesia.

No change to our earnings forecasts at this juncture. The group'sproperty & investment holding division which was in the red with a RM7milEBIT loss this quarter should improve over time on the back of an increasingnumber of tenants. The division oversees the management of KL Festival City 'Parkson's first local self-owned retail mall.

We are maintaining our BUYrecommendation on PHB with an unchanged fair value of RM6.84/share based on our sum-of-parts (SOP) valuation. PHBremains a cheaper proxy to HK-listed Parkson Retail Group (PRG Hk Equity, Non-rated)for exposure to China's retail industry, and offers investors exciting growthopportunities via a growing stable of store networks in Malaysia, Vietnam and Indonesia.    

Source: AmeSecurities

Impressive growth momentum

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: ECMLIBRA

Price Call: BUY

Target Price: 6.40

MIDF Research upgrades Parkson to Buy, raises TP to RM6.42

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: MIDF

Price Call: BUY

Target Price: 6.42

KUALA LUMPUR (Nov 24): MIDF Research has upgraded PARKSON HOLDINGS BHD [] (PHB) to Buy from Neutral with a higher target price of RM6.42 (from RM4.82).

The research house said on Thursday that it was adjusting its sum-of-parts valuation to include the recent listing of Parkson Asia (PA) as well as stake dilution in PA to 67.6%.

'We also ascribed a higher PER12 for its China operation of 18.7x (previous 13.4x) and PRA (Malaysia, Indonesia and Vietnam) operations of 13.7x based on its peers average multiple (refer table D and E).

'We like PHB given its exposure to regional retail sector as well as its on track network expansion plan,' it said.

Parkson lowers FY12/FY14 profit forecasts post PRA listing

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: AFFIN

Price Call: BUY

Target Price: 7.15

Parkson Holdings Bhd
(Nov 3, RM 5.58)
Maintain buy with lower target price RM7.15 from RM7.97: Parkson Retail Asia (PRA) was listed on the Main Board of the Singapore Stock Exchange (SGX) yesterday.

Details of the IPO are as follows: (i) Issuance of 80 million new PRA shares and 67 million existing PRA shares under the offer for sale programme (total: 147 million shares) at a price of S$0.94 per share. The over-allotment option of 22 million shares has also been subscribed/purchased, bringing the total number of offered PRA shares to 169 million; (ii) Overall, the IPO will raise S$158.9 million (RM391.2 million), while the offer price values PRA at S$636.7 million (based on an enlarged share base of 677.3 million shares). We estimate that Parkson Holdings Bhd's (PHB) share of the IPO proceeds amount to S$77.5 million.

Our calculations imply that prior to the listing, the market was pricing PRA at a mere 6.3 times CY12 price earnings ratio, far below PHB's CY12 PER of 13.5 times and and Parkson Retail Group's (PRG) 17.2 times.

Based on: (i) our CY12 net profit forecast of S$44 million; and (ii) PRA's IPO price of S$0.94 per share, PRA is valued at a much higher CY12 PER of 14.4 times. This is, in our opinion, a fairer valuation given PRA's exposure to the growing regional consumer market. In 2012, PRA will be launching two new stores in Vietnam, three in Malaysia and two to three new stores in Indonesia.

We ascribe a PER target of 16 times for PRA, representing a 19% premium to PHB's CY12 PER of 13.5 times. We believe the premium is justified, given PRA's regional presence and strong Asean growth opportunities, particularly within Indonesia and Vietnam and the present investment holding company status of PHB.

Coupled with: (i) the stake dilution in PRA from 90.1% to 67%; (ii) a lower PER target of 23 times (previously, 25 times) for PRG, to reflect the weaker global market sentiment; (iii) a higher holding company discount of 20% (previously, 10%) and; (iv) raising our net cash balance, our sum-of-parts-based target price of RM7.97 is lowered to RM7.15.

Despite the downgrade, there is still 30% upside to the current share price of RM5.50. Maintain 'buy' on PHB, for its exposure to both PRG and PRA. ' Affin Investment Research, Nov 3


This article appeared in The Edge Financial Daily, November 4, 2011.

Good IPO price for Parkson Holdings' stakeholders?

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: OSK

Price Call: BUY

Target Price: 6.68

Parkson Holdings Bhd
(Oct 10, RM5.45)
Maintain buy with reduced fair value of RM6.68 from RM7.58: The Edge weekly reported that Parkson Asia's (PA) shares may be offered to Parkson Holdings (PHB) shareholders at about a 30% discount to the proposed IPO price.

A PHB circular to shareholders said PA may be priced at a minimum 17.4 times price-earnings ratio (PER) against FY11 net profit of S$35 million (RM85.2 million) with the new share issue making up 18.9% of its enlarged share capital and generating proceeds of no less than S$115 million. PHB will sell up to 13.1% of PA's enlarged share capital and raise no less than S$56 million.

As we highlighted in our previous report, we think the listing of PA would be positive for PHB given that it could increase PA's valuation as the company grows bigger. Based on the latest market cap of Parkson Retail Group (PRG) and PHB, the market is currently valuing PA at only a 6.7 times forward PER (based on our FY12 forecast for its net profit).

Assuming that PRG's current market cap does not reflect a 20% holding discount and incorporating a 20% discount to PRG's market cap, PA has an implied PER of 17.5 times, which is more or less in line with its potential minimum listing trailing valuation of 17.4 times PER.

There is no direct listed peer comparison for PA in Singapore. While the consumer companies listed on SGX are trading at a relatively low PER of 5.3 to 13.4 times, we think that PA ' which could be the largest consumer retail company listed in SGX and it has a solid track record ' would allow the group to list at a stronger valuation.

Furthermore, PA provides investors with regional retail exposure in Vietnam, Indonesia, Malaysia and soon, Cambodia.

Note that the potential 17.4 times listing trailing PER only incorporates one month's earnings from its Indonesia operation, and the minimum target listing PER would have been lower at 15.1 times had the full-year earnings of its Indonesia business been included.

Assuming PA is listing at a 17.4 times minimum trailing PER, shareholders would be able to subscribe for PA at 12.1 times PER, which we think is attractive considering its growth potential and given that the discounted offer is lower than PA's current implied PER of 17.5 times.

While PHB's fundamentals remain unchanged, we reduce our fair value (FV) from RM7.58 to RM6.68 as we have updated our net cash balance and reduced our target PER for its China operation from 24 times to 22 times PER given the weakening share market.

Factoring in a 20% holding discount and a 62.7% diluted stake (90.1% stake currently) in PA (assuming 18.9% new shares to be issued and 13.1% of offer for sale), our post PA listing FV for PHB will be reduced to RM6.14, which still offers approximately 13% upside against its last closing price.

The potential upside risk to our post listing FV is if PA manages to list at more than a 10% higher PER. Hence, we maintain our 'buy' recommendation on PHB. ' OSK Research, Oct 10


This article appeared in The Edge Financial Daily, Ocotber 11, 2011.

Parkson charging forward with Indonesia unit

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: AMMB

Price Call: BUY

Target Price: 6.79

Parkson Holdings Bhd
(Aug 24, RM5.60)
Maintain buy at RM5.60 with revised fair value of RM6.79 (from RM6.60): We reiterate our 'buy' recommendation on Parkson Holdings Bhd (PHB), with a raised sum-of-parts fair value of RM6.79 (RM6.60 previously) upon rolling forward our valuation base year to CY12F and fine-tuning our earnings forecast by -4% to -5% post full-year results.

PHB posted a higher net profit of RM346 million (year-on-year [y-o-y]: +21%) for FY11. Results met consensus estimates, but came in 8% below our 12-month forecast due to a larger than expected variance owing to currency translation from unfavourable foreign exchange movements (strengthening ringgit against the yuan and the Vietnamese dong). Hence, we deem results to be broadly in line with our expectations.

The improved performance in FY11 was mainly due to: (i) Healthy same-store sales growth (China: +12%, Malaysia: +10%, Vietnam: +21%); (ii) Enlarged network of outlets (China: +4 to 47, Malaysia: +1 to 36, Vietnam: +1 to 7) and; (iii) Earnings before interest and tax (Ebit) margin improvement of one percentage point y-o-y to 29% on better cost control and merchandise mix.

On a sequential basis, revenue and net profit in 4QFY11 declined 11% and 33% owing to seasonally lower consumer spending from the absence of Chinese New Year.

Moving forward, our three-year compounded annual growth rate of 22% for FY12F/FY13F will be well underpinned by the management's accelerated expansion in gross floor area (GFA) by 51.5%-owned Parkson Retail Group. Certainly, a more aggressive strategy to add 20% to 25% GFA against 15% per year previously should lower its average store age and help lift same store sales growth of Parkson outlets in China.

Besides China, PHB's earnings growth would also be buoyed by contributions from additional outlets in Malaysia, Vietnam and Indonesia (under Kem Chicks and Centro brands). We maintain our annual new store forecasts of two each in Malaysia and Vietnam, and four in Indonesia. Total merchandise margin should remain flattish at circa 19.5% to 20%, while fashion and apparel as well as cosmetics and accessories are expected to dominate with 70% to 89% of group revenue.

Despite a moderating macroeconomic outlook in China, we remain positive about PHB's long-term earnings growth trajectory. Expect news flows from the proposed listing of 90.1%-owned Parkson Asia to provide some excitement in the medium term. ' AmResearch, Aug 24


This article appeared in The Edge Financial Daily, August 25, 2011.

Listing of PAG to be value enhancing

Stock Name: PARKSON
Company Name: PARKSON HOLDINGS BHD

Research House: OSK

Price Call: BUY

Target Price: 7.58