Sharing some information and personal views on Parkson Retail (O9E)
Based on the charts, unlikely there will be any immediate recovery. the downtrend has been quite rampant since the break of 0.150 and 0.140 mark. There are 2 ways to look at it:
1. for trading clients who are trying their luck at 0.150 or lower, there has to have a stop loss price level. This is to avoid huge paper loss if it were to fall even lower. But do note that no one knows where is the bottom price. if only life is that simple, we all will be able to buy at the lowest and sell at the highest. On hindsight, it seems not right to buy at 0.150 because it is now 0.120 (lowest as of now 0.118). but based on 1 year price history, 0.150 is a mark for rebound.
For that, a way out would be to average down the current holding price. However, please note that averaging only works if the price goes up. If not, it will be simply just increasing trading losses when the price goes further south .
If averaging, one can consider picking some shares at strategic prices, such as 0.120, or 0.130 etc.
2. for clients who are still holding on (including myself for my personal trades), you can look at the fundamental and valuation of the company. In summary, there are 2 driving forces resulting in the massive drop in this counter.
a. Firstly Parkson Retail reports earnings in MYR (Malaysian Ringgit). With the current strong USD, MYR has been weakened significantly.
b. Retail business has been on the decline.
"...Same-store sales for Parkson Retail Group fell 9.7 percent in the first half, while for the Golden Eagle Retail Group the drop was 8.7 percent. Chinese shopping centre operator Intime Retail, which is backed by Alibaba, posted sales that fell 3.7 percent in the first nine months of the year." Taken fromhttp://www.scmp.com/business/markets/article/2044786/chinas-traditional-retail-industry-remain-weak-shoppers-stay-home
As such under such marco environment, it is both difficult and probably impossible for the price to recover to its former glory in short period of time, much less the 0.150 mark.
But all is not lost.
This share is listed on 3th Nov 2011, with an offer price of 0.940. Of course, times have changed and this might not be an accurate measurement of the current valuation of shares.
Parkson Retail and Group are currently listed in KLSE, SGX and HKSE. The recent analyst report (30th Nov) of Parkson Retail 5657.KL from MorningStar gives a fair value of 0.84 sens. With 0.84sens as an indicative fair value, converting sens to cents that is currency conversion MYR to SGD respectively, it comes to about 0.28cents fair value. (0.84/3 = 0.28)
Personally, I will take it at 0.200cents conservatively due to SGX trading mechanism. The price at 0.200 increases differently after the 0.200 mark. That is to say 0.199, 0.200, 0.205, 0.210. For traders who have bought at 0.199 will naturally sell at 0.205 for a gain of 6 pips, which translates to a stagnant of price around the 0.200 before the next decisive move.
In terms of managing and operating, the group has been actively managing its outlets, closing down the unprofitable outlets with stringent cost control measures. By closing down the unprofitable outlets, it helps to reduce costs and losses, which is only logical to do so.
Lastly, from the AGM report, the management is currently deploying experimental shopping experience and organising events in hopes to draw more retail crowds to the malls. Not to mention, the group has free online shopping to buy products from their website with no delivery costs.
I took a few screenshots and attached the document for reference. For my friends who have the shares already, if you have spare cash, consider averaging down at a preferred price.
And for the rest who are still not keen in Parkson and are looking to buy into retail business sector, certainly, there are other considerations such as BHG holdings, captialmall trust etc. Each has its merits and shortcomings.
Sharing my personal views, compiling it for all. Feel free to share and discuss if I missed out anything.
