DBSV Research issues an Equity Explorer report on Parkson Retail Asia (PRA) with fair value of S$1.55. PRA is a leading department store operator in Southeast Asia, and is a beneficiary of Southeast Asia’s rising consumption growth. The group is usually an early entrant in the markets it operates in. It is the largest departmental store operator in Malaysia and second largest operator in Vietnam since its entry there in 2005. Its first store in Myanmar is expected to be operational by March 2013. Our analyst projects 15% earnings growth in FY13F largely driven by both store expansion and same store sales growth. This is on the back of a growing middle class and a better consumption appetite in Asean countries. PRA currently trades at 19x FY13F PE, just under its average PE of c.20x. We believe the counter has priced in potential earnings upside surprise from its new markets. Upside price catalysts could come from a better-than-expected operational performance from its stores, resulting in a higher growth rate.
Mr Lim Ming Yan will take the reins of CapitaLand Group as its president and chief executive officer from Jan 1. Mr Lim, who will also be appointed as a director of CapitaLand, will take over from Mr Liew Mun Leong, who announced his plans to retire in June next year. Mr Lim is currently CapitaLand's chief operating officer, a position he has held since May 6 last year. He is also the deputy chairman of CapitaLand China Executive Committee. The appointment of Mr Lim is within expectation and given his familiarity and long time experience in various roles within the group, we expect the transition to be smooth. Going forward, we believe the group is likely to
remain focused on its pan Asian footprint with core markets including Singapore and China.
Lippo Malls Indonesia Retail Trust is buying shopping mall assets in two Indonesian cities that would cost a total of about S$188m. In Palembang, capital of South Sumatra province, Lippo Malls will buy 389 units at Palembang Square for S$59.9m and the Palembang Square Extension for S$28.4m. In Jakarta, the trust will buy 37 units in Tamini Square for S$23.1m and the Kramat Jati Indah Plaza for S$69.3m. In addition to these purchase prices, Lippo Malls expects further fees and expenses to bring the total acquisition cost to S$188m.
DynaMac is placing up to 139.5m shares (93m new and 46.5m vendor shares) at S$0.50 per share. The placement price is at a discount of 7.5% to last weighted average price. The net proceeds of about S$45.7m will be used for working capital purposes.
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