PARKSON (TP RM5.50– Buy)
Initiating Coverage: A Consumer Retail Behemoth
We initiate coverage on Parkson Holdings (PHB) with a BUY based on a RNAV of RM5.50, valuing the stock at 17.5x CY10 EPS. Despite the 45% appreciation in its share price over the past 3 months, we think there is still scope for further upside premised on (i) the strong recovery in China’s domestic economy which will boost retail sentiment, and
(ii) the good prospects for its Vietnam operation. PHB provides an attractive and cheap exposure to Hong Kong-listed Parkson Retail Group (PRG), which is trading at a 12-month forward PE of 23x. The stock will also benefit from being a constituent of the new FBM KLCI come July 6.
PICORP (TP RM0.59– Buy) Corporate News Flash: It's Business As Usual
O&G SECTOR (OVERWEIGHT) Sector News Flash: Petronas-ExxonMobil Sign PSC Pact
TECHNICAL VIEW- KLCI: Consolidation Continues
MEDIA HIGHLIGHTS
· Petronas Inks Agreement with Exxon Mobil
· Malaysia, China to Ink RM7bn of Trade Accords
· Can-One to Proceed with Kian Joo Stake Acquisition
· Petra Perdana’s Unit Takes Delivery of Vessel
· Dialog, Johor Govt in MoU for Deepwater Petroleum Terminal
· New Business Direction for Kurnia Setia
ECONOMIC HIGHLIGHTS
· Indonesia: Central Bank Lowers Key Rate for Seventh Straight Month
· Euro: Services, Manufacturing Shrank More Slowly in May
· Euro: Producer Prices Decline the Most on Record
· UK: Services Grew in May for First Time in a Year
· US: Factory Orders Rise for Second Month in Three
· US: Services Shrink, Job Losses Mount
· US: Bernanke Warns Deficits Threaten Financial Stability
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