PARKSON / 5657 - 2010 Q2

PARKSON HOLDINGS BERHAD

Listing Date: 28.10.1993
Market: MAIN
Sector: TRADING / SERVICES
Par Value: 1.00
Major Industry: Metal Producers & Products Manufacturers
Sub Industry: Steel Producers - Integrated

Parkson Holdings Berhad is a Malaysia-based investment holding company. The Company, along with its subsidiaries, is principally engaged in the operations of the Parkson brand department stores. The businesses are located in China, Malaysia and Vietnam. The Company has a chain of 82 Parkson department stores, with 31 in Malaysia, 46 in China and 5 in Vietnam. The Company’s subsidiaries include East Crest International Limited, Prime Yield Holdings Limited, PRG Corporation Limited and Sea Coral Limited. On October 9, 2008, East Crest International Limited, a wholly owned subsidiary of the Company, disposed of Jet East Investments Limited. In August 2009, the Company acquired Bond Glory Limited, which is the legal and beneficial owner of the entire equity interest in Choice Link Limited.

OSK TP: 6.55 (02 March 10)
My decison: NOT BUY (unless price below 5.2)
Reason: EPS big depend on gain on dilution of retail operations and not sure whether is consistent or not, possibly the price is over value

My opinion based on 2010 Q2 report (number in '000):
- The Group posted a favourable set of results with gross sales proceeds rising by approximately 10% to RM4,221.1 million compared to RM3,846.2 million in the preceding year corresponding period. Accordingly, the Group's profit from operations improved by about 10% to RM377.1 million
- The commendable results were attributed to the healthy same store sales growth which was achieved through a combination of continuous merchandise brand refining, more efficient use of available floor space and improved product offerings. The opening of the seven (7) new stores (1 store in Vietnam and 3 stores each in the PRC and Malaysia) during the period under review have also strengthened the Group's network and operations
- Estimate next 4Q eps after 2010 Q2 result announced = 0.528, estimate PE on current price 5.74 = 10.78(DPS 0.05)
- Estimate next 4Q eps after 2010 Q1 result announced = (0.513+0.4234)/2 = 0.4682, estimate highest/lowest PE = 13.14/10.76 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.4234, estimate highest/lowest PE = 12.9/11.6 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.4234, estimate highest/lowest PE = 13.6/10.84 (DPS 0.05)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.4234, estimate highest/lowest PE = 11.1/7.51 (DPS 0.1)