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Flash Note – Parkson (REDUCE, maintain) - PRA 9MFY06/13: Within our but below consensus




Affin Hwang Investment Bank Bhd


09 May 2013





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PRA’s 9MFY06/13 core net profit is within our expectation Yesterday evening, Parkson Holding’s (PHB) 67.6%-owned unit Parkson Retail Asia (PRA) reported its 9MFY06/13 financial results. Gross sales proceeds (GSP) and revenue grew by +6% and +8.2% yoy to S$860.3m and S$334.2m respectively, driven by healthy YTD same store sales (SSS) growth in Malaysia: (+5.6% yoy) and Indonesia: (+4.9% yoy). The resilient domestic consumer spending in these countries has helped to lift commission from concessionaire sales (yoy: +7.1%) and direct sales (+2.9%). Notwithstanding the healthy topline growth, PRA’s 9MFY06/13 PBT and net profit fell by -5.3% and -7.5% to S$49.3m and S$33.7m respectively, dragged down by: 1) the frail operations in Vietnam (PRA’s Vietnam operations registered YTD SSS contraction of -1.3% with PBT plunging by -35.6% yoy to S$3.5m), and 2) the high start-up costs from the set-up of its e-commerce business, and high brand building expenses. As a result, EBIT margin slid by -1.35%-points yoy to 5%. Results were within our forecast but below consensus expectations, accounting for 71% of our full year estimate but 65% of consensus forecast.

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