Affin Daily Insight (LV) - 19 May 2014 - PARKSON / MMC / PUNCAK / ECONOMY - GDP / ECONOMY - US OUTLOOK / DMR

Top Calls

Company Update � Parkson (REDUCE, maintain) - 9MFY14 preview: Earnings could fall by 48% yoy Parkson Holdings� (PHB) 67.6%-owned Parkson Retail Asia (PRA) had announced its 9MFY14 results on 8 May 2014, with 9MFY14 core earnings fell by 16% yoy to SG$29.5m. Likewise, PHB�s 51.5%-owned Parkson Retail Group (PRG), also reported a weak set of earnings, with 1QFY14 core earnings slumped by -39% yoy to RMB139.3m. In view of the sluggish earnings recorded by its subsidiaries, our back-of-envelope calculation suggests that PHB could register a 9MFY14 earnings contraction of around 48% yoy to RM108m (scheduled for release on 22 May 2014). That said, we believe that results would come in within our expectation but below streets� estimates. Overall, we remain concern over the: 1) stiff competition within the retail sector in this region, typically from the booming e-commerce industry; 2) higher operating cost environment with growing rental, staff and store maintainence expenses; and 3) the sluggish SSS growth as compared to its hey days, with an average SSS growth of at least 12-15%.

Other Calls

Flash Note � MMC Corp (ADD, maintain) - MMC-Siemens wins Pengerang Co-generation Plant EPCC contract

Flash Note � Puncak Niaga (ADD, maintain) - Puncak accepts Selangor offer

Economy � GDP 1Q2014 - A better-than-expected 6.2% real GDP growth in 1Q14

Economy � US Outlook � Weekly Wrap (12 � 16 May 2014) - US economic indicators show signs of slowing down

Debt Market Research - Volume taperes on profit taking ahead of weekend, buying interest to recover following tepid US data and strong M�sia GDP

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