Posted by kcchongnz > Jun 2, 2013 12:28 PM

Is Parkson a good company? Is it a good investment? 

Posted by yfchong > May 31, 2013 02:14 PM | Report Abuse 
bro KC from nz, any change to comment on Parkson.. 

Yeah, felicity has written a good analysis on Parkson and there are also valuable comments there. Go and have a read. 

For me I still think Parkson is a good company. That is despite that its growth has slowed down considerably these two years. Its margin has also contracted, quite badly to 15% based on its 2013 ttm results, down from 20% a year ago. ROE and ROTC also suffered quite badly, retreating to 12% and 5% respectively. This is mainly due to the slowdown in the China market. Parkson has forayed into Indonesia, Vietnam and Sri Lanka. So Parkson’s continuous success very much depend on the recovery of China’s economy and the success in those new countries. 

Below is my assessment of Parkson if it is a good company and a good investment. 

Parkson a Good company? 3.82
Good governance Yes
Durable business Yes
Growth No 2.3% in revenue 
ROTC No 5% <WACC 
Balance sheet Yes 0.33 D/E 
Cash flow Yes 157% CFFO/NI 

Screens for investing
ROTC No
P/B Yes 1.5 <2.0 
PE ratio Yes 14.4 <20

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