Parkson’s 1H17 improved performance a sign of better 2H17
KUALA LUMPUR: Parkson Holdings Bhd’s (Parkson) first half of 2017 (1H17) results have been deemed by the research arm of Kenanga Investment Bank Bhd (Kenanga Research) as a promising indication of a better 2H17.
As per a filing on Bursa Malaysia, Parkson’s profit for the year to date ended December 31, 2016 amounted to RM81.52 million.
According to Kenanga Research, Parkson’s 1H17 core loss after tax and minority interest (LATAMI) widened to RM129.9 million compared to the core loss of RM60.3 million in 1H16.
“We consider the results to be within our expectation on a better 2H17 as China is showing positive signs of recovery with its first positive same-store-sales growth after recording negative growth over the past several quarters,” it said.
Kenanga Research noted that Parkson is focused on delivering the group’s transformational strategies closely aligning with the evolving retail markets, which include enriching its retail format and expanding its product and services offerings, optimising store effectiveness and efficiency and enhancing cross platform experience for its customers.
“Specifically, the first Parkson Newcore Citymall was officially opened in January 2016 in Shanghai, which offers value for money products in a vibrant, energetic and innovative shopping environment.
“Sales of this Korean-themed outlet increased visibly in 2016 compared to the year before,” the research arm said.
The research arm further noted that building on the success of this Korean-themed outlet and the joint venture with E-Land Group, the group is targeting to open a second Parkson Newcore Citymall in Nanchang during 1H17.
It added that in June 2016, the group achieved a milestone with the grand opening of the 230,000 square metres (sqm) Qingdao Lion Mall, signifying the group’s move into the shopping mall segment in China.
All in, Kenanga Research upgraded Parkson to ‘outperform’ from ‘underperform’.
Kenanga Research’s target price was also raised from RM0.70 per share to RM0.88 per share as the research arm imputed higher target prices for both Parkson’s listed operating units (Hong Kong-listed Parkson Retail Group Limited and Singapore-listed Parkson Retail Asia Limited) on the back of a better trading sentiment.