KLCI Stock - PARKSON / 5657 - 2011 Quarter 3

Company Info

Market Capital (Capital Size)	6,299,503,200 (Very Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(5.76-0.16)/0.3403 = 16.46 (Moderate)
Target Price	6.13+0.16 = 6.29 (PE 18.0, EPS 0.3403, DPS 0.16)
Decision	BUY
Comment	Revenue increased 5.9% to highest record and is third consecutive quarter increasing and also higher than preceding year corresponding quarter 6.3%, eps increased 11.2% and is third consecutive quarter increasing and also higher than preceding year corresponding quarter 21.1%, cash generated from operating is more than enough to cover all expenses, stronger liquidity ratio but still at low level now, lower gearing ratio but still at very high level now, payables ratio still very high
First Support Price	5.5
Second Support Price	5.3
Risk Rating	MODERATE

Research House

BIMB Target Price	7.57 (2011-01-24)
MIDF Target Price	5.9 (2011-04-05)
HwangDBS Target Price	6.5 (2011-04-11)
ECM Target Price	6.4 (2011-04-14)
OSK Target Price	7.42 (2011-05-16)
RHB Target Price	6.1 (2011-05-26)

Accounting Ratio

Return on Equity	10.56%
Dividend Yield	2.78%
Profit Margin	30.73%
Tax Rate	24.92%
Asset Turnover	0.3816
Net Asset Value Per Share	1.97
Net Tangible Asset per share	0.85
Price/Net Tangible Asset Per Share	6.84
Cash Per Share	2.73
Liquidity Current Ratio	1.3128
Liquidity Quick Ratio	1.0522
Liquidity Cash Ratio	0.9204
Gearing Debt to Equity Ratio	1.953
Gearing Debt to Asset Ratio	0.5629
Working capital per thousand Ringgit sale	35.6%
Days to sell the inventory	131
Days to collect the receivables	55
Days to pay the payables	306

My notes based on 2011 quarter 3 report (number in '000):-
- Consumer sentiments continued to gain strength in the 9 months period ended 31 March 2011. Coupled with effective management of product mix and floor space alignment as well as tactical promotional activities, our Parkson operations reported healthy same store sales growth across all 3 markets in Malaysia, China and Vietnam (9%, 12% and 22% respectively). However, due to the appreciation of the Ringgit Malaysia against the Chinese Renminbi and Vietnamese Dong, lower operating results were consolidated into the Group. Gross sales proceeds for the 9 months under review rose only 9% to RM7,276 million compared to RM6,693 million a year ago with profit before taxation reported at RM620 million

- Excluding the impact of the currency translation as mentioned above, on a comparable basis, profit before taxation for the 9 months period ended 31 March 2011 increased by 20% to RM664 million

- As expected and reported in the previous interim report, the Group continued to record satisfactory results in the current quarter on the back of higher spending during the Chinese New Year festivities. Group's revenue was 6% higher at RM801 million, with profit before taxation improving by 20% to RM246 million as against RM205 million in the immediate preceding quarter

- Estimate next 4Q eps after 2011 Q3 result announced = 0.3094*1.1 = 0.3403(0.3094 from recent fourth quarter eps), estimate PE on current price 5.76 = 16.46(DPS 0.16)
- Estimate next 4Q eps after 2011 Q2 result announced = 0.1587*2*1.05 = 0.3333, estimate highest/lowest PE = 17.19/15.09 (DPS 0.16)
- Estimate next 4Q eps after 2011 Q1 result announced = 0.3015, estimate highest/lowest PE = 19.24/17.38 (DPS 0.15)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.3015, estimate highest/lowest PE = 20.17/17.74 (DPS 0.06)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.2741*1.1 = 0.3015, estimate highest/lowest PE = 18.91/16.42 (DPS 0.05)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.2676*1.1 = 0.2944, estimate highest/lowest PE = 20.48/17.15 (DPS 0.05)

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