KUALA LUMPUR, June 18 (Bernama) -- Bursa Malaysia’s key index finished marginally higher, supported by strong buying interest in consumer-related counters, amid mixed performance across regional markets. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 1.40 points, or 0.08 per cent, to 1,711.39 from Tuesday's close of 1,709.99. The key index opened 12.36 points firmer at 1,722.35 and moved between 1,711.31 and 1,722.63 throughout the session. Market breadth was negative, with losers leading gainers 678 to 493, while 549 counters were unchanged, 1,016 untraded and 34 suspended. Turnover increased to 4.50 billion units worth RM3.45 billion from 3.93 billion units worth RM3.45 billion on Tuesday.
Remain neutral call with unchanged target price (TP) of RM0.72
Parkson Holdings (PHB) started FY17 with a net loss of RM62.6m due to losses incurred in all segments. Stripping out impairment losses on goodwill, other receivables and property, plant and equipment of RM60m, estimated core net loss of c.RM26m was still below our and consensus expectations. Core segments such as Malaysia and China are still facing tough operating environments with same store sales (SSS) at -7%. Separately, the disposal of its 100% interest in Beijing Huadesheng Property Management Co., Ltd to Shenzhen Qianhai Tulan Investment Centre (LLP) and Shanghai Changkun Investment Management Co Ltd. is expected to bump up its earnings by c.RM300m or 28 sen per share upon completion. All told, we keep our earnings unchanged for now pending more clarity from Management on earnings trajectory given current challenges. Our Neutral call and TP remains unchanged at RM0.72, based on 14x multiple to our FY17F EPS.
- China, albeit managing to improve its SSS from -9% in the previous quarter to -7% currently, is not out of the woods yet, we believe. Continued weak spending and consumption patterns coupled with stiff competition and the rapid development of e-commerce platforms will are key challenges. To recap, Parkson has already stepped up its efforts to remain relevant, having launched a new mobile shopping application, Parkson Plaza in June to leverage on digital platforms in enhancing customers’ shopping experiences. However, it has not made any meaningful inroads as yet and the path to profitability appears to be challenging near term.
- Southeast Asia segments. Other segments including home-ground Malaysia also registered losses, amidst weak consumer sentiment. In Malaysia, SSS was -7% due to less buying days following the shift in the Hari Raya calendar. However, revenue in Malaysia rose 5% on opening of new stores. Similar issues happened in Indonesia. As for Vietnam and Myanmar, the retail market is getting crowded with more competition. All told, we still expect the Southeast Asian segment performance to remain subdued near term.
Source: PublicInvest Research - 24 November 2016
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