Parkson Retail Asia

Parkson Retail Asia: CIMB maintains O/p with $1.75 TP. House hosted investor meetings with mgt, which affirmed that Jan and Feb SSSG trends have been running better than in 2Q. Msia (74% of 1H gross sales proceeds or GSP) is seeing double-digit growth, helped by Chinese New Year (CNY, pre-election handouts and a low comparison base from last yr. SSSG in Indonesia (14% of GSP) is in the high single-digits, also helped by CNY and solid domestic consumption demand. In Vietnam (12% of GSP), SSSG has turned from -8.4% in 2Q to a positive number QTD. The 7-8 new stores being planned for FY13 and FY14 on the existing 56-store network are on track, including the April 2013 opening of the first store in Myanmar and the FY14 opening of the first store in Cambodia. PRA may also increase its present 47.5% ownership in Odel in Sri Lanka by up to 2% pts a year so that Odel’s results may be consolidated in two years’ time. Overall, house like grp’s entry into new countries, solid management team, strong balance sheet ($0.30 per share) and cash flows (projected $30m in FCF in FY13 and growing with earnings). House reccomends opportunistically accumulating shares in the $1.50-1.60 range