Parkson Indonesia to be key income driver

HwangDBS Vickers Research has forecast that Parkson Holdings Bhd (PHB) is set to turn its Indonesian operation into a key income driver.

In a research note today, the research firm expects Parkson Indonesia's net profit contribution to almost double from the RM12.5 million forecast in financial year 2012 to RM23.3 million in 2013.

It will also account for three and 4.4 per cent respectively of PHB's financial year 2012 and 2013 net profit forecast respectively.

"After completing the acquisition of PT Tozy Bingtang Sentosa in mid-June, PHB will implement cost saving efforts," HwangDBS said.

This, it added, would be done by leveraging on the group's network of suppliers to source for cheaper merchandise and streamline marketing expenses and staff structure.

Under PHB's medium-term strategy, it plans to expand its retail store network in Indonesia to between 20 and 25 outlets by 2015 from six now.

PHB also plans to open several new outlets in the first half financial year 2012, including two-three new ones in Malaysia, eight in China and one in Vietnam.

This would be followed in financial year 2013, by two in Malaysia, eight in China and one each in Vietnam and Cambodia, to take the group's total store network to 112 by the end of financial year 2012 and 128 in 2013.

HwangDBS also foresees the potential listing of Parkson Asia being a boon for PHB shareholders.

Parkson Asia would be an independent unit that would house the group's retail operations in Malaysia, Indonesia, Vietnam and Cambodia.

HwangDBS is maintaining a "buy" rating for PHB with the revised net asset value based target price nudged up to RM7.45 from RM6.70.--Bernama