19% + dividend expiring/ex date coming soon for Hong Kong shares.

Parkson Retail Group Ltd. (HK) Free Cash Flow (FCF) has been increasing for the past few years based on Gurufocus website hence the 2nd Consecutive Year for Dividend payout? Last year 9% dividend payout based on previous share price. FCF calculated by gurufocus website is higher than its market capitalization.

Quite crazy undervaluation of Parkson HK shares.
Price: RMB0.10 +
Dividend: RMB0.02

Disclosure: I own Parkson HK shares, Long position. No short positions in any Parkson shares.

Parkson Retail Group Ltd. (3368.HK) announces 20% Interim Dividend of RMB0.02/HKD0.022 based on its latest price of HKD0.11, for First Half 2024, despite overall revenue slow down.

“Parkson Retail Group Limited is a leading nationwide lifestyle commercial operation service provider in the People's Republic of China. The Parkson brand was introduced to the Beijing market in the early 1990's and has now operated and managed a diversified collection of retail format including department stores, shopping malls, concept store *Parkson Beauty", city outlets and selection supermarkets. Currently, the Group operated and managed 42 Parkson
stores and 2 Parkson Newcore City Malls, in 28 cities in PRC and Laos.”

Recently Parkson China have opened new Supermarket model outlet(s). Notably Parkson Credit and rental services revenues have been growing, with continuous cost rationalization strategies.

Parkson’s Beijing Financial Street building solely earns HKD271mil (12 year contract) in rental compared to its current Market Capitalisation of HKD379mil.

Great shocking reward to HK shareholders.

One of Parkson’s new mall:
http://www.parksongroup.com.cn/html_en/about_parkson/News_Detail.php?cid=122

As 1% shareholder you can demand for board nomination and other corporate proposals (low chance of succeeding);

If your fellow 1% other owners decide to support your cause via proxy voting (higher chance of succeeding);

if your total proxy supporting votes reach 10% you can call for minor AGM (greater chance of succeeding).

Look at Disney stock in U.S., Trian Fund sort of borrowed ~30mil shares from a major 1.6% shareholder and has demanded all sorts of corporate proposals. If other investors feel the same, they can support your cause and management will have to take action. (All figures are estimates) since then share price has gone up from $80 to $109.

In the end of the day, if you have a proposal that is good for our business, we should all jointly support that proposal. As shareholders, we are all part owners of Parkson.

I’ve written to management before (not sure if they read my messages/emails), but measures taken since the pandemic has been very positive. They have changed their business model quite a lot to generate more stable returns like selling more in house brands, operating F&B, associating with strong brands like Apple and Starbucks, their new mall operations like Lion Mall & jointly operated Newcore Malls (Korean theme), rental office building in Beijing Financial street & more.

Parkson Holdings Berhad reports PROFIT for Year to Date 2023:
Total PROFIT attributable to owners of Parent AND Non-controlling interest = RM28,795,000,
Total COMPREHENSIVE PROFIT for the year 2023 attributable to owners of Parent AND Non-controlling interest = RM55,556,000

The bursa result that says (Basic earnings/(loss) per share (Subunit) of -1.79 sen for current Year To Date 2023);
this ONLY counts PROFIT attributable to owners of Parent that incurred loss (RM20,544,000).
This DOES NOT include:
PROFIT attributable to owners of Non-controlling interest that recorded PROFIT RM49,339,00 and
DOES NOT include Other Comprehensive PROFIT RM26,761,000.

I feel like news are always negatively bias toward Parkson share to somehow bring down its price. Media always loves to report negative news.

I for one am happy that management have managed to make a BIG turnaround despite the pandemic. Things are looking more & more positive!

Read their Results Report. Don’t rely on Bursa summary, news, etc.

Parkson counters limit up gap up! (Parkson Retail Asia also reported profit)
Parkson Retail Group Ltd FY2023 reported PROFIT again with

INCREASED TOTAL GROSS SALES PROCEEDS ("GSP") inclusive VAT = RMB10,093,900,000 representing a year-on-year INCREASE of 9.5%.

INCREASED OPERATING REVENUE by 11.4% to increase to RMB4,177,500,000

NCREASED OPERATING PROFIT - FY2023 = RMB505,500,000

Same Store Sales ("SSS") increased by 7.1% in 2023

INCREASED RENTAL INCOME (check their latest report, very nice number)

Very NICE numbers from PARKSON CREDIT division as well.

Overall Parkson has done an amazing job. Checkout who owns Parkson HK shares. Even owner of Parkson’s competitor owns Parkson shares and few smart value investor funds.

Latest Parkson mall in China as of Jan 20204 has Apple and Starbucks stores!!

Great job to Parkson management team. They have taken many positive steps to bring forth their latest results.

10% tax on low value goods sold online to kick in on Jan 1, 2024
https://theedgemalaysia.com/node/694115

Parkson competitors costs going up 10% ? Will tax enforcements increase on small online traders/sales?

Looks like Good news for Parkson

Read Parkson Retail Group Ltd. 3rd Quarter PROFIT Report; http://www.parksongroup.com.cn/upload/202311/170012513735642900.pdf

PARKSON RETAIL GROUP LIMITED - 16/11/2023

Parkson Hong Kong/China-makes up ~70% of Parkson Bhd total business

UNAUDITED THIRD QUARTERLY RESULTS ANNOUNCEMENT FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2023

HIGHLIGHTS

Total operating revenues for the Third Quarter (“3Q2023”) and the First Nine Months of The Year (“9M2023”) are RMB1,000.1 million and RMB3,218.3 million respectively, representing an increase of 7.3% and 10.0% respectively as compared to the corresponding period last year.

Same store sales (“SSS”) decreased by 3.8% in 3Q2023 and increased by 2.2% in 9M2023.

Profit from operations for 3Q2023 was RMB125.1 million. Profit from operations for 9M2023 increased by RMB357.2 million to RMB389.9 million as compared to the corresponding period last year of RMB32.7 million, representing an increase of 1093.8%.

Profit attributable to owners of the Company in 9M2023 was RMB67.3 million as compared to loss attributable to owners of the Company of RMB241.3 million in the corresponding period last year.

Parkson HK latest Building Rental on Beijing Financial Street = ~HKD 250mil ANNUALLY
Parkson HK Market Capitalisation = ~HKD 418 mil

Imagine you buy a house now for RM1mil and get rental RM596,000 every year
(just assuming underlying business break even)

This is the price of Parkson. Anyone can buy house & get ~60% rental of asset price today?

Additionally, we receive ~9% dividend from PRGL stock this year 2023 (based on prev price).

Parent company Parkson in Malaysia is super undervalued and making $$ now. No more just asset play. Whoever conducting “market making” will eventually have to buy/sell at higher price.

Fake que based on fact; just to test, Bought 10 lot, 32,000+ que disappeared at 0.285 earlier.

If buy based on fact Parkson is again GREEN - PROFIT again 3rd time this year = make money.
If buy base on que = no make money.

Anyone saw their debts? Its been going down.

I see no reason for Parkson to be so cheap but thank you for letting us buy after announcing 3rd positive quarter result 2023 from Parkson subsidiary Public companies . Good job.

More shares acquired by new substantial shareholder this week in open market.

Current managements’s efforts to take action against previous management is applauded. It is quite rare for action to be taken against fiduciary acts that eats away shareholder value. Additionally, without a doubt an IPO if properly executed will be of great asset to KNM Bhd. Consider getting in some real experts JP / Goldman / Moelis.

Another applaud for possibly incoming management for stating this:
“anyone can do asset strip by selling assets of the company at distressed prices”.

. . . her vision for the next five years, which includes injecting new capital, acquiring new assets to increase Borsig’s current capacity, substantial investments into new projects, cooperating with inter-governmental bodies and securing new long term contracts.

“We have the local and European resources to assist KNM to settle its debt repayment,”

This is what all shareholders want to hear!

(Albeit any corporate exercise may involve share issuance but i’d support anything that adds shareholder value in the longer run rather than subtracting value slowly and painfully)

As I suggested a 50-50%, old and new representation in management might be the best way forward for ALL shareholders.

KNM’s NTA should be closer to RM0.60 per share based on KNM 2020 Annual Report.

Subsequent quarterly reports / (2022 AR) states NTA of RM0.23 ASSUMING a complete sale of Borsig which was is now trying to be listed - IPO.

ADDITIONALLY, NO company repays total debt in 1 go. In cases of lack of cash flow, companies should try renegotiate loans and pay back slowly. Preferably issued at preferable interest rates that may be attained in lower interest rate countries.

Hence my suggestions previously to engage with experts the likes of JP Morgan / Goldmansachs for IPO track.

Regarding shares “go to 1sen”, if company was liquidated you will still receive proceeds from that exercise. Meaning one could buy a lot of shares at 1sen and make a ton load of $ assuming liquidator doesn’t commit any con job. In the end, shareholders are owners of company and management are the employees. All parties should act in the interest of shareholders.

Too much misrepresentations in all info. Just some corrections update. Feel free to rebut.

New substantial shareholder:
Date interest acquired 06 Oct 2023
No of securities 203,475,000
Direct (%) 5.031
Circumstances by reason of which Securities Holder has interest;
ACQUISITION VIA THE OPEN MARKET.

Date of General Meeting Record of Depositors ; 11 Oct 2023

Date of Meeting; 16 Oct 2023

Why traders panic when got large shareholders fighting with big sums of $ to win over in upcoming AGM?

Just let those who fighting proxy battle bid up share price.

From the latest interview current management head has already stated they are lobbying to get more votes to their side (in particular Kenanga). It’s quite obvious both competing management parties are still trying to get more votes.

Final week of Proxy Fight.

1 Majority shareholder bought more shares last week; as per recent Bursa announcement.

The recent chairman recommendation to list Borsig in Singapore and transfer certain intellectual etc rights to Singapore at lower tax rate is a great idea if it can be done.

The fact that coming AGM to change of board of directors have led to an increase of share price drastically is unequivocally great news.

Is it feasible to vote for a 50-50 representation of current and new management, select the best out of all recommendations new and old?

Wonder how much $ leader of newbie investor groups getting from bigger fund? Happily big funds get to collect now at low prices with reasonable volume.

Newbie investor group need to stop “managing” and let the stock go back up to its real valuation.

Parkson is profitable this year, owns new buildings/malls built and owned by Parkson and management has been positively influenced by the new generation members of the founding Cheng family. I expect continuous innovations to continue. i find their Facebook page in Malaysia quite impressive among numerous other things. Their credit operations has been expanding. Laws are being enacted for small online businesses which will enable big business to have a higher advantage in terms of costs. All positive for their business going forward.

All in target 0.50 in the short term.

Too much fake news here trying to get minority shareholders who owns majority of outstanding shares to sell to parties that want to win the upcoming proxy fight for cheap cheap price. NO THANK YOU.

The most profound statement was trying to get us to sell our shares before price go to 0. ?? If price go to 0, won’t I just be able to buy the whole group, liquidate its assets and keep the difference for free. Care to give us KNM’s liquidation value? I bet it’s pretty high compared to current super low stock price.

2nd last week before voting. Who wants to win proxy fight need more shares so what’s going to happen to price this week?

Group trying to select new board of directors have 10% plus interest.

All minority shareholders (“Ikan bilis”) have how much, 50-60% of shares?

So who minority shareholders vote for will win coming proxy fight?

@auditorandconsultant, for your DBS Vickers, do they deposit your shares into individual CDS accounts in each 7 global market? Or do they register you directly as shareholder with each foreign share company? Or ALL under DBS Vicker nominee account?

Any advice versus Ameritrade licensed in Singapore? (Now presumably licensed under Scwab)

Pardon Parkson holders. This info is for everyone’s future benefit if venture overseas.

I cant access KNM Bhd data on bursa today Sunday. Anyhow,

Current debt in default is RM409.46mil (in the form of Thai bonds)? Is this currently the main thing to be concerned of?
And would Thai bio-ethanol plant assets amount to this or less or more?

Can you refinance the Thai bond maybe via some Japanese bond issuance which still have one of the lowest interest rates worldwide? German bonds are considerable at 1st glance.

If cant list Borsig via sponsor etc or sell Hudson at good price, why not consider help from professionals at Goldman / J.P Morgan? They are pretty skilled at listing for good prices especially if you have a good foreign listed business.

Shareholders would like more info on Thai operations. So much money has been spent there, whats economics of bio-ethanol previously and now? Were there unreported related 3rd party transactions? Can this business turn around? Whats the current operation financial breakdown?

All in maybe give shareholders a simple explanation or a press release.

Thank you @auditorandconsultant. Great infos! No wonder i4 Parkson article seemed professionally done.

@Why2TellMeWhy, my Parkson holding was red for a long time now since rm3 & green for sometime already. Still long way to go up.

KNM Bhd have got good overseas assets but need to solve Thai bio-ethanol project debt. Once that cleared, KNM owned companies are mostly profitable. Stock easily worth RM1 and above.

Minority shareholders wont sell cheaply to anyone. See Hovid Bhd, offered RM0.38 to privatized now who still own in private market is worth RM1-1.20 per share.

KNM needs to restructure/delay/solve Thai debt then stock will return back.

If there’s going to be proxy fight, if everyone stop trading, those who want to win will have to buy all outstanding shares in market and price can easily go up.

(Note: Please invest according to your own risk profile. Speculate at your own discretion.)

Directors are more liable for business misconducts/fraud/etc today with new Malaysian law in place.

Now directors want to sell subsidiary FBM Hudson Italiana S.p.A. for EUR 12mil? Then TheEdge reports got new buyer for EUR 22mil?
Unaudited Net Assets of Hudson is EUR40mil.

In KNM Annual Report 2022:
"The growing demand for liquefied natural gas in global currently is expected to spur the capital expenditure for gas storage and processing facilities. This will certainly benefit our operation in ITALY, which is one of the global leading manufacturers of air coolers, a critical equipment necessary for gas liquefaction process."

We understand that the company has overleveraged via Thai bonds that are currently in default stage. Shouldn't actions be taken in Thailand via ethanol plant restart if viable and discussions to restructure loan in default rather than force selling of assets at a loss?

Malaysian public companies need to realize they are accountable to all of the shareholders not just a few big shareholders/funds. Minority shareholders can form a group of 10% and take legal action like what the latest group of investors are trying to accomplish. Of course yet to be seen what are their goals and motivations.

@goldmanbull, I'm quite impressed with the i4 blog you mentioned/wrote. Hardly people do their research. Good work.

I've had this stock since rm3. price went up & down drastically cause of some newbie investor group. if newbie investors weren't busy "trading", this stock would already be at rm0.50 by now. plain vanilla investing is the way.

Current management could have kept only Borsig division that is profitable and this stock would be a whole lot higher. Please provide more info on Thai division. Were there unreported Related 3rd Party transactions in Thai ethanol plant?

All this while It feels like assets are trying to be sold off at undervalued prices. waiting to see new management proposal for the future.

Minority shareholders who own 10% of the company shares just have to reject privatisation (if any) and there wont be any privatisation. Those who scared reading the word "mandotary offer", that is just legal wordings. It is not mandatory whatsoever.

Some people hold on to Hovid Bhd share that was privatised at .30+ sen, now worth rm1-1.20 in private valuations.

I havent read much on Olympia but their gaming division is very juicy. Well worth keeping any legal NFO. In annual report they say NFO operators have been lobbying to get online license.

I dont recommend for trading/speculation etc. Only buy if you are INVESTING.

Time for Parkson price to start reflecting its value. Has anyone checked how much rental 1 of Parkson new building is being rented out? do the math. This stock seriously way too cheap.

Operators/market makers who keep trying to manipulate is going to get sued in a class action by minority shareholders if you don’t stop trying to depress Parkson’s price. Or their identities/employers revealed in social media. Parkson price has been depressed to the absolute maximum ridiculous price. Time to stop and make money from normal market operations, plain vanilla investment; buy and keep and let everyone keep buying, finally allowing Parkson to gain back its value. You can sell your stake slowly once price is past RM1.

Typically analysts ("experts") use earnings and future earnings based valuation methods. FOR EXAMPLE, if you rent a house valued at RM1mil for rm1500 per month, the valuation on the house is based on the rm1500 monthly income or RM18,000 annually. If you only collect RM15,000 a year or collect nothing at all due to renovation cost etc, they revise the house price downwards. Of course the best way is to look at the company's balance sheet or their net assets AND at the same time figure out if they can continue collecting their "rent" UNLESS the company behaves like an investment company that buys and sells property as well as having an operating business that utilises these properties.

Parkson; China operation’s Quarter ended 31st March (Parkson Retail Group Ltd).

Operating profit: RMB 31,216,000
Net profit: RMB 5,194,000. Attributable to shareholders; RMB 1,143,000 (0.09% of revenue)
Cash & equivalents: RMB 4,875,184,000 (RM 3,062,114,156)

Their Gross Sales Profit (after Value-added Tax) for this quarter was RMB 4,406,890,000. In other words, China operations sold goods and/or services worth about RM2,767,416,212 . (This is differentiated from Parkson’s Revenue of RMB 1,254,924,000)

Assuming now due to high competition / online sales competition / sunset industry etc etc Parkson have very few customers buying goods from their stores;

So say this quarter they had only 10 million or 10,000,000 customers;
That was a recorded sales of about RM92 per month per customer for 10 million customers for this recent quarter at a cost of RM26 per month per customer and a revenue of rm26.27 accordingly.

Despite the low margins currently, it is believed that their customer base is where one of where Parkson’s value lie. They have customers in diverse locations with ready hand distribution and partnership with international brands. Every business even online would require distribution centres and collaboration with brand owners; as can be seen when Alibaba’s bought over Intime among other online retailers that are acquiring on-the-ground stores. No doubt original manufacturers opting for direct online sales is an issue. However, original manufacturers tend to concentrate on their core business as such when Coca Cola sold off their main bottling plants to focus on their brand and product offerings besides reducing capital expenditures and monetising assets.

[ Note: Parkson has low margins as seen in the example of between rm26 and rm26.27 however it is still a cash business as new malls and stores incurs high capital expenditures and depreciation charges and asset sales generate cash surplus. Moving forward, higher own brand sales, own mall income and lower renegotiated rentals/other costs should contribute positively to revenues and margins. )

In today’s world the online scene seems to be the way forward. Unless people lose interest in outdoor shopping/dining/entertainment activities as compared to experiencing them at home, it is believed retailing will survive despite it being one of the most competitive industries. 

Parkson’s value may be realised sooner if a larger retailer with a good business model Notices Parkson’s core competencies & would like to Joint Venture or make a takeover bid to extend their reach to a competitive market like China. Otherwise, its value may be realised via their ongoing turnaround measures should they progress smoothly.

In the end successful businesses evolve.

As an interesting comparison before Parkson’s current results,
Amazon sells at more than 150x Price Earnings ratio (PE) and 18x Price to Book ratio (P/B) and 3x Enterprise Value to Sales (EV/Sales). Parkson Retail Group Ltd sells at more than 13x PE ratio (PE) and 0.42x P/B ratio and 0.25x (EV/Sales). Source: Marketwatch.com, WallStreetJournal 18/05/17. Despite the wonderful business model that Amazon has, Parkson Retail’s valuations appear dubious.


[ This is purely a quick personal opinion of a long term shareholder. Any decision taken should be based on sound judgement with risks fully born by the decision maker. Informational discrepancies are possible. ]

Berkshire Hathaway is streaming their Annual Shareholder Meeting Live now 10PM Malaysia, 10AM ET. Catch it on yahoo finance.

http://www.scmp.com/business/companies/article/1935439/new-china-consumption-tax-seen-encouraging-mainlanders-spend-more

Translated (Bing translator) from : http://www.expansion.com/2014/12/11/catalunya/1418300507.html
Dated 11/12/2014
Tous jewelry chain has signed an agreement with the international group The Lion Group, through its commercial division Parkson, to deploy a network of stores in China. The Catalan company already had a presence in the Asian giant years ago but closed all its stores to not have found the right partner.
"China is a market that is complicated by its characteristics and its dimension, and we were looking for the right partner; We are convinced that Parkson is that partner, for their knowledge, their experience and their coverage of the country and that with them we can develop any business plan that we propose"explained the President of Tous, Alba Tous.
The opening of establishments will begin in 2015. Reference in the main shopping streets and stores more stores inside shopping malls will be opened. "We will gradually get to do things well and consolidate the brand in the country; "the pace of the market will determine the pace of expansion, we want to grow but seeking excellence" stressed Alba Tous.

This is my personal analysis/opinions on Parkson.

Parkson's current price in analogy/example would seem to be the price of buying a CoffeeShop business by paying only for the location (considering a discounted Net Tangible Assets evaluation (DNTA)). Parkson generated about RM139mil of net profit FY2014 ending June that included higher beginning depreciation costs for new outlets including accelerated depreciation costs (on the back of higher Gross Sales Proceeds and Revenues which has not account for new/ selected refurbished stores). This translates into RM0.123 of profit/earnings per share that effectively new shareholders will pay nothing (free) for which does not yet include the price of goodwill & Parkson's reproduction value, the cost of building or setting up a similar extensive business model.

Parkson share price is currently reflecting the drop in its net profits over est. 3 years. Largely, the cost that have caused the drop seem be the the investments costs to expand business footing (depreciation etc) and China's new policies affecting sales. However, unlike Parkson most of their competition in China (& most retail companies in US) grow with debt e.g. Golden Eagle Retail Group Ltd. Should retail business slowdown or see an increase in competition (Alibaba etc), Parkson with its strong balance sheet & cash and it's businesses in emerging markets (with at least 2-3 times faster retail growth than developed nations) will be able to dampen all negative effects with competition retailers having higher probability of running into financial stress due to their higher debt structures. And a simple online retail opinion would be that we will always find it more gratifying to purchase items in a brick and mortar stores without having to deal with online problems in retail (wrong delivery/measurement/colour/quality/quantity/etc).

Lastly, Parkson's recent 5 year business plan revaluation has been positive in that they have realised their problems/issues and in a short time have successfully started to implement changes via diversification (AUM Hospitality, Watatime, Giftmate, Valino, Mango (in China), Tous (jewellery from Spain)). Parkson also seeks to produce in house brands where currently it's competition in China are already producing in house brands yet having almost similar margins that of Parkson.

Due to these reasons and many other reasons, I believe Parkson share is currently undervalued for it is currently valued as per income statement. And share buybacks (at lowest price in 8 years) with cash stored for bad times, with expansions done via internally generated funds and having distribution channels as large as existent makes Parkson a good investment. Lastly, Parkson is part of Khazanah National Bhd's portfolio.

Please invest based on your personal analysis & judgement for the above are all representations of opinions based on annual/interim/research reports.

http://www.nst.com.my/node/56783
https://www.hlb.com.my/main/assets/files/hlbvn-launches-mobile-merchant-payment-service.pdf