Parkson- affected by weaker Chinese operation

Result Update

For QE30/9/2012, Parkson's net profit dropped by 24% q-o-q or 35% y-o-y to RM59 million while revenue inched higher by 1% q-o-q or 6% y-o-y to RM837 million. The higher revenue was attributable to stronger consumer spending in Malaysia & Indonesia during the Hari Raya festival. Net profit dropped due to poorer consumer sentiment in China.


Table 1: Parkson's last 8 quarterly results


Chart 1: Parkson's last 23 quarterly results 

Valuation

Parkson (closed at RM4.53 on Friday) is now trading at a PE of 14.3 times (based on last 4 quarters' EPS of 31.72 sen). At this PE multiple, Parkson is deemed fully valued.

Technical Outlook

Parkson has been range-bound between RM4.00 & RM5.50 for the past 3 years. Unless the share price can break out of this range, the stock will continue to trade sideway.


Chart 2: Parkson's weekly chart as at Nov 29, 2012  (Source: Quickcharts)

Conclusion

Based on poorer financial performance, full valuation & unexciting technical outlook, Parkson is rated a HOLD.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Genting Parkson.