KLCI Stock - PARKSON / 5657 - 2011 Quarter 2

Company Info

Market Capital (Capital Size)	5,927,581,645 (Very Large)
Par Value	RM 1.00

My Analysis

Forecast P/E now	(5.42-0.16)/0.3333 = 15.81 (Moderate)
Target Price	6.00+0.16 = 6.16 (PE 18.0, EPS 0.3333, DPS 0.16)
Decision	BUY
Comment	Revenue increased 15.2% to highest record and is second consecutive quarter increasing and also higher than preceding year corresponding quarter 6.6%, eps increased 20.4% and also higher than preceding year corresponding quarter 12.2%, both positive free and net cash flow increased, liquidity ratio decreased and is at low level now, gearing ratio increased to very high level again, payables period very high but going to offset by capital from sale of investment, opening a new mall which going to bring in rental income
First Support Price	5.3
Second Support Price	5.0
Risk Rating	MODERATE

Research House

BIMB Target Price	7.57 (2011-01-24)
HwangDBS Target Price	6 (2011-02-23)
OSK Target Price	6.31 (2011-02-24)

Accounting Ratio

Return on Equity	10.65%
Dividend Yield	2.95%
Profit Margin	27.10%
Tax Rate	23.08%
Asset Turnover	0.3751
Net Asset Value Per Share	1.91
Net Tangible Asset per share	0.78
Price/Net Tangible Asset Per Share	7.0
Cash Per Share	2.74
Liquidity Current Ratio	1.2568
Liquidity Quick Ratio	1.0019
Liquidity Cash Ratio	0.8823
Gearing Debt to Equity Ratio	2.1008
Gearing Debt to Asset Ratio	0.5829
Working capital per thousand Ringgit sale	31.0%
Days to sell the inventory	135
Days to collect the receivables	53
Days to pay the payables	326

My notes based on 2011 quarter 2 report (number in '000):-
- Continuous efforts to improve productivity of our Parkson stores through merchandise upgrading and realignment of the floor space utilisation have enabled the Group to deliver healthy same store sales growth for the 6 months ended 31 December 2010 across all three markets in Malaysia, China and Vietnam (10%, 11% and 23% respectively). However, due to the weakening of the Chinese Renminbi and Vietnamese Dong against the Ringgit Malaysia, lower results were consolidated into the Group. Revenue for the 6 months under review was only 5% higher at RM1,413 million compared to RM1,351 million a year ago with profit before taxation reported at RM373 million

- Excluding the impact of the currency translation, on a comparable basis, the Group's revenue increased by 11% to RM1,505 million as compared to the preceding year corresponding period. Accordingly, profit before taxation increased by 16% to RM402 million

- The Group registered better performance in the current quarter on the back of year end festivities and the holiday season. The improved consumer sentiment has enabled our Parkson operations to achieve a 15% higher revenue of RM756 million as compared to RM656 million reported in the immediate preceding quarter. In line with higher revenue coupled with better operating efficiencies, profit before taxation improved by 22% to RM205 million for the quarter under review

- Next quarter expected higher spending during the Chinese New Year festivities

- Estimate next 4Q eps after 2011 Q2 result announced = 0.1587*2*1.05 = 0.3333, estimate PE on current price 5.42 = 15.78(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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