KUALA LUMPUR: Operational challenges in Southeast Asia will keep Parkson Holdings Bhd
's earnings subdued at group level, says PublicInvest research.
The research house increased the discount in its valuation to 75% from 50% previously to a target price of 40 sen while maintaining its neutral recommendation.
It said this as Parkson Retail Group, the China arm of Parkson Holdings, announced a net loss of CNY33.5mil for 3QFY18, 41.2% wider than the net loss of CNY23.7mil in the previous year's quarter.
"Cumulative 9MFY18 net loss, however, was smaller at CNY15.8mil (9MFY17 net loss: CNY28.1mil), cushioned by the stronger growth in previous 1Q," said PublicInvest.
Revenue in the recent quarter rose 8.2% year-on-year to CNY 1.05bil and became the seventh consecutive quarter in which the group reported an operating profit.
However, the research house said in its Wednesday report that while Parkson's business model is now operationally profitable, the momentum has been weaker than expected with translation into net profit likely to take longer.