soon 0.75

soon 5.85

soon 4.70

Told you guys, soon 0.80

PublicInvest revises Parkson to Outperform, says worst is over

KUALA LUMPUR: Following Parkson Holding’s latest quarter results which saw FY13 full-year earnings drop 36.7% to RM240.5mil year-on-year on weaker sales in China, PublicInvest Research says it believes the company’s performance has bottomed out and is upgrading its recommendation to Outperform.

Target price is, however, unchanged at RM4.17 for the stock, which closed Tuesday at RM3.30.

It says the company managed to end on a brighter note despite the expected weak China performance, with full year 2013 results meeting 101% and 98% of its revenue and earnings estimates for FY13.

According to the research house, year-on-year growth in revenues was marginal at 2%, or RM3.5bil, due to unfavourable global sentiments and weaker discretionary spending. In addition, operating margin was lower from 1) the opening of seven new stores (four in China, and one each in Malaysia, Indonesia, and Myanmar) in the financial year, 2) higher rental expense, and 3) rise in wages.

Same store sales growth (SSSG) saw negative contributions from China and Vietnam, but Malaysia saw a growth of 4.5% and Indonesia 5.6%.

Sales in China are expected to improve with the reopening this year of Parkson’s flagship stores in Shanghai and Beijing. And the company is continuing to expand with another five to six stores in China and 10 in South-East Asia. Its Sri Lanka operations will also see expansions.

Meanwhile, the property and investment holding division registered RM33mil in revenues from the high occupancy rate at KL Festival City.

“We do like Parkson for its 1) strong balance sheet, with net cash of around RM1bil, 2) growth plans to expand Parkson Retail Asia’s contribution and its property and investment divisions which could see more value in the medium term, and 3) catalyst from most Asean governments encouraging consumption growth,” it says.

0.80 soon

Buy (maintained)

Target price: RM6.04

ALTHOUGH DiGi's stock price has appreciated 38.6% year-to-date, DiGi remains a key pick for the telco sector moving into 2013.

Our buy rating is premised on DiGi's continued growth story and strong capital management initiatives.

Both factors, in our view, are likely to drive stock price towards our discounted cash flow target price of RM6.04 (based on a weighted-average cost of capital of 6.3% and growth of 1%).

As at the third quarter (Q3) of 2012, DiGi's revenue market share expanded to 28%, up from 27.5% from end 2011 (27% as at end 2010).Growth has largely been driven by its above peer average net adds over the past two years which was also accompanied by a fairly stable, if not, higher average revenue per user (ARPU).

We believe that its growth month-on-month momentum will persist as it consolidates its market share in the youth and Malay ethnic group segments, two key growth areas.

We understand that DiGi's market share in the Malay ethnic market segment remains below average and has recently only hit double digit market share.

On the one hand, while this is extremely low, especially for an established telco player, this also leaves significant scope for growth in the near future. We believe that improving its 3G footprint would be key to driving this growth.

Management targets to accomplish more than 70% population coverage by end of next year (it is about 63% currently) and thus enabling DiGi to offer their services across new markets, and particularly in new areas of coverage.

The roll out of 3G coverage also enhances DiGi's postpaid proposition, which should further aid ARPU enhancement.

With its revenue and growth trajectory intact, we are forecasting core dividend per share (DPS) to improve in financial year (FY) 2013. Although our FY13 DPS assumption is based on a 100% dividend payout, we nevertheless suspect that there is potential for upside to our DPS forecast of 22.6 sen for FY13.

Management has reaffirmed its commitment to optimising shareholder returns which thus leaves upside risk. A potential way of extracting more returns for shareholders is via a business trust structure, an option that management is already evaluating.

Key investment risk includes irrational competition which could potentially lead to higher handset subsidies and lower tariffs.

This could be sparked off by the recent round of lower interconnect rates, although we believe that the incumbents are likely to remain rationale.

The awarded LTE spectrum would also raise the number of players in the market, although being a niche high end product, impact from the smaller players are likely to be less meaningful.

going up soon, hold on to your horses

Going to hit 0.80 soon

Don't worry guys. Going up soon

Going up soon. Hang on

Why only Digi telecom counter going down? Maxis stable. Why?

How come still have not declare divident?

Instead of keeping your money in the bank might as well park it in Digi. Bank FD pays 2.8% interest. Digi pays average of 6.5% dividend per year. Don’t worry whether it goes up or down as long as the dividend is higher than the bank. My advice is hold on for very long term and enjoys the dividend. Rule of the thumb; invest your money in stocks that you don’t really need it for at least five years.

There is a saying, IF everybody sells it is time to buy. Penny stock, cheap cheap. goes up you will be a millionair over night
Give it a shot guys. China is going to buy lots of rubber soon. They have reduce the import duty. Might go up to 80 cents in two months time.

Hi Guys, What PE means?