Thursday, July 11, 2013

Parkson Retail Group : The worst may not be over (CIMB)

Parkson Retail Group
3368 HK / 3368.HK
Current HK$2.98
Target HK$2.60
The worst may not be over

 We expect negative SSSG for Parkson in 2H13 for three reasons 1) the anti-corruption campaign which could drag down sales in Beijing and Shanghai, 2) Parkson’s ageing store portfolio and fierce competition in key markets, and 3) lack of large mall-like projects in the pipeline.

For 1H13, we estimate negative SSSG and a 17% yoy earnings drop to Rmb435m. We cut our FY13-15 EPS forecasts by 8-9%and reduce our CY14 P/E from 8x to 7x, based on the average of its close peers, Maoye and NWDS. This lowers our target price to HK$2.60.Investor confidence could be dented by the recent resignation of the CFO even though this is not a surprise to some investors. Maintain Underperform.


What Happened
In May, Parkson trimmed its FY13 gross sales proceeds (GSP)growth target from low teens to ~10% and its SSSG target from ~5% (set in Feb) to ~3%. We think that Parkson will find it a stretch to hit the targets as SSSG was flat in Apr and May and 1Q13 SSS fell 2.8%. Our channel checks revealed that anti-corruption activities had the most severe impact on sales in Beijing and Shanghai(low-teens % of Parkson’s GSP in 1Q13), which could also explain the weaker menswear and watch sales.

What We Think
We think that 2Q13 SSSG is likely to be negative and Parkson could lower its FY13 sales target further. We forecast a 9% drop inFY13 earnings based on an SSSG decline of 2% in FY13(low-single-digit falls in both 1H13 and 2H13). We expect the average commission rate to drop 0.2%ptsto 18.2% in FY13.

Furthermore, the recent resignation of the CFO could lower investor confidence as Mr Clarence Wong has been the key IR contact since Parkson’s IPO in 2005. The acting CFO, Mr Au Chen Sum is relatively new, having joined Parkson in 2010.The company has yet to announce a replacement plan.

What You Should Do
Parkson’s share price has fallen 52% YTD vs. 8% for the HSI. It is trading at an inexpensive FY13 P/E of 9x, a discount to the sector average of11x.But we see downside risk to its FY14-15 earnings due to its ageing store portfolio and the lack of large stores in the pipeline. Switch to Intime (Outperform,TP: HK$9.00).



Source/Extract/Excerpts/来源/转贴/摘录: CIMB-Research,
Publish date: 10/07/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock