KLCI Stock - PARKSON / 5657 - 2010 Quarter 3

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
Market Cap : 1036410250*5.35 = 5,544,794,837.50 (Large)
NTA per share : (1805481-1181978)/1081635 = 0.58
P/BV : 5.35/0.58 = 9.2241
Forecast P/E now : (5.35-0.05)/0.528 = 10.04 (Moderate)
ROE : 29.03% (High)
DY : 0.05/5.35*100 = 0.93% (Low)
Fixed Asset Turnover(3 year) : (0.3873+0.4254+0.4003)/3 = 0.4043 (Low)
Liquidity Ratio : 3150470/2634596 = 1.1958 (Low)
Receivables Collection Period : (486848+807282)/2/(2679493/365) = 88 days (Acceptable)
My Target Price : 6.34+0.05 = 6.39 (EPS 0.528, PE 12, DPS 0.05)
My Decision : BUY
My Comment : Revenue increased, good cash flow, high debt, navps decreased
Technical Support Price : 5, 4.85
Risk Rating : MODERATE
OSK Target Price : 6.64 (25 May 10)

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.

My opinion based on 2010 Q3 report (number in '000):
- Our retail operations continued to deliver favourable performance on the back of strong regional economic growth. Coupled with continuous merchandise brand re-alignment and timely store refurbishment, the Group generated a growth of 10% gross sales proceeds compared in the same period of last year
- Included in the profit from operations for the current quarter was a share options expense of RM20.1 million arising from the share options granted by Parkson Retail to its eligible employees. Excluding the impact of the share options expense, on a comparable basis, profit from operations for the current quarter increased by 17% compared with the preceding year corresponding quarter and this has resulted in the higher profit from operations for the 9 months period ended 31 March 2010 (excluding the share options expense)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.528, estimate PE on current price 5.35 = 10.04(DPS 0.05)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.528, estimate highest/lowest PE = 11.42/9.56 (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)

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