Tuesday, May 5, 2015

New addition: Parkson Retail Asia

I initiated a small position on Parkson Retail Asia yesterday.

I will wait for the latest quarter report before I explained in details my buy decision, and to shed more light with more updated figures.

I was waiting for the price to fall another 10% since I last blog about it. I got what I wanted. 

I wanted to buy the counter in February when the Vietnam closure of  Keangnam tower Parkson made me think twice. Since then it has fallen even more. 

If you look at the way Parkson is falling, it is almost like it is a S-chip. It is only less than 30% from its peak. 

Although there are plenty of headwinds, weak ringgits, competition from e-commerce and other conventional retailers, consumer confidence going down, as well as the hanging compensation issue from Vietnam, but 

1) It is a company in net cash.
2) Making profits even during 2009 Crisis
3) Generating FCF quarters to quarters.

 Assume profits take a 30% hit from last year (Already a bad year), we are still looking at less than 15 PE.

The only reason I think could swing Parkson into a loss will be the write off costs for Vietnam Store. 

Anyway, It is a very small position. More like a push force for me to do even more research.

3 comments:

  1. this is what i don't understand. selling those good companies for this.

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    Replies
    1. Hi Kyith,

      Thanks for the comments
      I also could not understand why you didn't like the company. I understand why those companies I sold are good companies, maybe you can be a bit more forthright and tell me what is wrong with Parkson?

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