Parkson Retail Group [HK 3368]

Parkson Retail Group Limited, a subsidiary of Parkson Holding Berhad released their 2008 results last Friday.

EPS growth was slowing down compared to past few years but still recorded a 24% growth - RMB 0.301(2008) vs. RMB 0.244 (2007). At HK 6.46, PE has come down to about 20X. Whether it is expensive or cheap, it will all depend on investors optimism. A very long term may find it cheap but a short term investor may find it expensive as they anticipate the market to mark down PE ratio to their earning. They may find it more expensive in relations to overall market PE(10-11X for H-Shares). DY is about 2.5%.

Looking at 1H and 2H 2008, their sales seems to stay flat even though the net profit has been well over 20-plus %, which is a very profitable business. The numbers for 1H/2H/Full Year (RMB million)

Sales 1,756/1,769/3,525
Net Profit 432/446/878

2009 likely to stay very challenging, most will be happy if they can deliver some growth or even flat earnings.

From Parkson Holding Berhad perspective, it is selling for about 13X PE. From short term perspective, it is fully valued. So, it's a hold if you may, but again from short term perspective and is a buy from long term perspective. Just my two cents.