HwangDBS cuts Parkson's earning forecasts (5657)

HwangDBS Vickers Research Sdn Bhd has cut Parkson Holdings Bhd's (PHB)
financial year 2013 (FY13) and FY14 earning forecasts by 3-6 per cent.

In
a note today, it said this followed DBS Vickers Hong Kong's 8-9 per
cent cut in Parkson Retail Group's (PRG) FY12 and FY13 earning
forecasts.

HwangDBS Vickers said the new forecasts followed the
revised full-year target of low to mid single-digit same-store sales
growth (SSSG) low to mid-teens' growth in gross sales proceeds, 0.2
percentage point fall in merchandise gross margin and operating losses
at new stores of 140 million renminbi.

It said PHB's
Singapore-listed 67.6 per cent-owned Parkson Retail Asia has showed
desire to rapidly grow its brand in developing countries across Asia,
after announcing ventures into Sri Lanka and Myanmar in July/August.

HwangDBS Vickers said the group expected to open its first store in Phnom Penh, Cambodia next year.

"We
believe it is heading in the right direction, by capturing first mover
advantage in these countries which have strong growth potential due to
large population and rising gross domestic product per capita," it said.

HwangDBS Vickers has downgraded its call on PHB to 'hold' with a lower target price of RM4.90.

Meanwhile,
Kenanga Investment Bank Bhd has maintained its earning estimates of
RM422.9 million and RM453.8 million for PHB's FY13 and FY14,
respectively.

"We remain conservative and have assumed mainly
mid-single-digit SSSG for the company given the uncertain global
economic condition, which could affect consumer spending," it said.

Kenanga Investment has downgraded the company rating to 'market perform' with a lower target price of RM4.86.

"Our
rating downgrade is premised on lower valuation premium for its Hong
Kong-listed unit, PRG, as we are concerned over potentially slower
growth rates from its China and Hong Kong operations," it said. --
Bernama