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.

Hai-O shares seen cheap

By Star Online: Business
25th Jan 2013

Hai-O Enterprise Bhd

By HwangDBS Research

Trading Buy

Fair value: RM2.95

THE stock has undemanding valuations with a price earnings (PE) multiple the cheapest among peers.

Hai-O is currently trading at 10.5 times 1-year forward PE, which is cheaper than Zhulian and Amway, which are both trading at 11 times and 17.5 times FY13F PE respectively.

PADINI HOLDINGS - A decelerating growth trajectory

By AmResearch
18 October 2012


HOLD

Price RM1.89 

Fair Value RM2.00

We re-affirm our HOLD recommendation on Padini Holdings, with a lower fair value of RM2.00/share vs. RM2.57/share previously, based on a 10% discount to our DCF value, following a downward revision on earnings. Our fair value implies a PE of 12x on FY13F earnings.  

IGB REIT to raise RM838m

By Star Online: Business
10 August 2012

PETALING JAYA: IGB real estate investment trust (IGB REIT) expects to raise RM837.5mil from the initial public offering (IPO) of 670 million units on Bursa Malaysia's Main Market.

The IPO represents 19.7% of the REIT's total listing of 3.4 billion units. Based on a retail price of RM1.25 per unit, the total market capitalisation of IGB REIT upon listing will be approximately RM4.25bil.

IGB REIT, a unit of property developer IGB Corp Bhd, said in its prospectus exposure issued to the Securities Commission that it intended to distribute up to 100% of its distributable income for the period commencing from the date of establishment until Dec 31, 2014, and subsequently at least 90% on a half-yearly basis.

REITs stand to gain, defensive qualities will shine in current trying times

By Star Online: Business
4 July 2012

PETALING JAYA: Real estate investment trusts (REITs), which focus on higher-than-market average yields, will stand out in the current uncertain economic and market environment due to their defensive qualities.

The impending listing of IGB REIT and KLCC Property Holdings Bhd's planned REIT could potentially raise investor attention to a sector otherwise viewed as a low-beta proxy to the economy.

Analysts contacted by StarBiz said they did not discount the possibility of eventual increased attention on REITs, saying that this could be a prelude to a re-rating for the sector.

Pavilion Reit - Exceptional FY13F, with upcoming Fashion Avenue and tenancy renewal BUY

By Am Research

20 Apr 2012

- We upgrade our rating on Pavilion REIT (PavREIT) from a HOLD to a BUY and raise our fair value to RM1.33/unit (vs. RM1.15/unit previously) based on a 5% discount to our DCF value of RM1.40/unit.

- Following a meeting with the management, we raise our earnings estimates for FY12F and FY13F by 1% and 2%, respectively, translating into a marginally higher DPU of 6.2 sen and 7.3 sen, underpinned by organic growth and acquisition. We assume a 99% payout ratio. 

- The Fashion Avenue (NLA: 68,000sf) is targeted to be opened by early September 2012. So far, there is a circa 90%  of precommitted tenants. The full impact of the Fashion Avenue and an estimated average rental rate of RM16psf, compared with under-RM10psf previously, would be seen in FY13F.

- Additionally, at least 67% of tenants are due for renewal in FY13F. We expect a 12%-15% rental reversion because tenants are committed to a 3-year tenancy during the infant stage of the mall. In our model, we forecast a higher weighted average rental rate of RM19psf for FY13F, vs. RM17psf for FY12F. 

- In order for Pavilion Mall to sustain its attractiveness, circa 5% of the tenants are changed on a yearly basis to provide a fresher appeal and a newer look to the mall. Tenants are also required to refurbish their space every 6 years.

- Elsewhere, management expects Farenheit 88 to stabilise its tenancy within 3 years by FY13F. PavREIT would acquire the mall if the owner decides to sell. As such, this may be PavREIT’s first asset injection that could take place by FY14, given that the mall is deemed fit.

- Pavilion extension (NLA:250,000sf, GFA:4,000sf), which consists of up to 8 levels,  will be adjoining the existing mall at levels 1, 2 and 3. Additionally, the mall’s appeal would be enhanced by a proposed glass-covered structure running from La Bodega towards the fountain. The extension is currently in the soil testing stage. Construction is to begin in 3QFY12. Management intends to acquire the extension immediately upon completion in FY16. 

- As Pavilion mall took a year to stabilise the tenancy, the extension is expected to take 6 months, given the maturity of the mall. Management expects full tenancy for the extension, underpinned by a long waiting list of over 400 applicants. 

- Management targets a distribution growth of 5% organically. However, FY13F will be an exceptional year, and as such, we are shifting our valuation basis to FY13F. Given this, PavREIT is attractive and we expect more news flow to excite the market. At current level, PavREIT has a dividend yield of 5.4% and 6.4% (vs CMMT: 5.6% and 5.9%) for FY12F and FY13F, respectively, and DPU growth of 18% in FY13F; hence, our BUY rating.

Price- RM1.15 

Fair Value- RM1.33

[Source]