Retail - Parkson Group (3368.HK) - "1~3Q Results in Line; Better Long-t
Key Points:
◆ Results in line. 1~3Q sales increased 23% to Rmb7.6bn while net profit rose 35.7% YoY to Rmb609mn over 1~3Q07 (excluding the impact from two small discontinued stores), in line with our expectations. 3Q08 bottom line growth (+27.5%) slowed slightly, mainly due to the opening of the new store in Shanghai.
◆ SSS growth didn’t decline. Parkson maintained organic sales growth of 14.4% in 3Q08, in line with 1H08, one of the highest figures among peers.
◆ Effective expenses control. Operating margin recorded modest improvement of 0.2ppt, despite opening of two new stores YTD.
◆ Acquisitions enhance profitability. Parkson completed the acquisition of remaining interests in Xi’an Shidai and Lifeng stores in 3Q, and two managed stores in October. Looking forward, Parkson still has the option to acquire ten managed stores and eight stores in which it has minority interests.
◆ Maintain earnings forecast, expect long-term sustainable growth. We believe Parkson’s strong ability to adapt to its changing environment, its cross- regional operations, steady organic growth and continued acquisitions should give with more earnings visibility than peers. We forecast 8% organic growth in 09~10, contributing 16% bottom line growth, with the remaining coming from acquisitions and new store openings.
◆ If the overall consumption slow-down is more significant than we expect, the price of Parkson’s acquisition targets will also decline. In this case, Parkson will acquire more stores to deliver growth.
Maintain BUY, but watch risks to its leading valuation. Parkson’s valuation (15.8x 08E EPS) is at the high-end of HK-listed consumer listcos, but we believe it deserves the premium for its outstanding fundamentals. In the short-term, however, if the market continues to slump, the valuation may face some pressure.
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发表于 2008-11-18 09:48
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