PublicInvest revises Parkson to Outperform, says worst is over

From The Star Online: Business
28th Aug 2013

KUALA LUMPUR: Following Parkson Holding’s latest quarter results which saw FY13 full-year earnings drop 36.7% to RM240.5mil year-on-year on weaker sales in China,PublicInvest Research says it believes the company’s performance has bottomed out and is upgrading its recommendation to Outperform.

Target price is, however, unchanged at RM4.17 for the stock, which closed Tuesday at RM3.30.

Long-term prospects for Parkson still good

From The Edge Malaysia
14th Aug 2013

GRANTED, the lacklustre growth of China's retail and consumer market has pulled Parkson Holdings Bhd's earnings down so far this year, but the medium to long-term prospects for the group, especially its China operation, are still good.

Briefly, department stores in China are facing challenges from the slowing economy, rising wage costs and heightened competition, not to mention the advent of online shopping.

While not that many analysts are excited about Parkson, with at least two out of three calling a "hold" on the stock, the sheer size of China's consumer market cannot be ignored. Plus, Parkson's share price has declined 19.83% to RM3.80 from a year ago.

According to Affin Investment Bank analyst Mandy Teh, China's retail market will recover by the second half of the year at the very least. Meanwhile, Parkson's plan to expand selectively and close non-performing stores on the mainland will reflect on the group's earnings going forward.