Parkson Retail Asia

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#11
Think this does not seems well to the company
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#12
Ok, it's official Parkson Retail Asia is worth <0 (adjusted for cash)

Market cap based on last trade: 115m SGD
Net Cash (as per last report): 120m SGD

It's a troubled business, but what exactly is happening? Surely their 60 stores in Malaysia/Vietnam/Indo/Myanmar are not worth 0!?
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#13
(18-02-2016, 03:54 PM)frus Wrote: Ok, it's official Parkson Retail Asia is worth <0 (adjusted for cash)

Market cap based on last trade: 115m SGD
Net Cash (as per last report): 120m SGD

It's a troubled business, but what exactly is happening? Surely their 60 stores in Malaysia/Vietnam/Indo/Myanmar are not worth 0!?

Sometimes a controlling shareholder has a lousy corporate governance track record so the mkt assigned a big discount to valuation.

e.g. got cash oneself keep. dont share with others.
"... but quitting while you're ahead is not the same as quitting." - Quote from the movie American Gangster
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#14
(18-02-2016, 03:54 PM)frus Wrote: Ok, it's official Parkson Retail Asia is worth <0 (adjusted for cash)

Market cap based on last trade: 115m SGD
Net Cash (as per last report): 120m SGD

It's a troubled business, but what exactly is happening? Surely their 60 stores in Malaysia/Vietnam/Indo/Myanmar are not worth 0!?

In retail biz model, the leverage isn't on bank debt, but on suppliers' "debt". A quick check on 1H report.

Net Cash 107 mil vs supplier "debt" of 81 mil with Payables 184 mil, Receivables is 39 mil, and Inventories 64 mil. Please bear in mind that, no discount usually for payables, but write-down is possible for inventories, and receivables

(not vested, but share a quick view)
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#15
(18-02-2016, 08:27 PM)CityFarmer Wrote:
(18-02-2016, 03:54 PM)frus Wrote: Ok, it's official Parkson Retail Asia is worth <0 (adjusted for cash)

Market cap based on last trade: 115m SGD
Net Cash (as per last report): 120m SGD

It's a troubled business, but what exactly is happening? Surely their 60 stores in Malaysia/Vietnam/Indo/Myanmar are not worth 0!?

In retail biz model, the leverage isn't on bank debt, but on suppliers' "debt". A quick check on 1H report.

Net Cash 107 mil vs supplier "debt" of 81 mil with Payables 184 mil, Receivables is 39 mil, and Inventories 64 mil. Please bear in mind that, no discount usually for payables, but write-down is possible for inventories, and receivables

(not vested, but share a quick view)

CF, where and what actually is the supplier debt of 81 mio in The balance sheet?

Thanks.
life goes in cycles, predictable yet uncontrollable; just like the markets, but markets give you a second chance
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#16
But still,

I believe it might be under-valued despite its many problems.

They have a record of paying dividends, to pay 2 cents they need to pay about 13 mio.

While core operating NP might be a challenge to hit 13 mio, looking at FCF it seems like not a problem


If u cut it further down to 1 cent dividend of 6.7 mio, it's still above 5% yield.

It seems punishing valuation for a still profitable company generating good cash flow

(Not vested but watching)
life goes in cycles, predictable yet uncontrollable; just like the markets, but markets give you a second chance
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#17
(18-02-2016, 08:39 PM)Greenrookie Wrote:
(18-02-2016, 08:27 PM)CityFarmer Wrote:
(18-02-2016, 03:54 PM)frus Wrote: Ok, it's official Parkson Retail Asia is worth <0 (adjusted for cash)

Market cap based on last trade: 115m SGD
Net Cash (as per last report): 120m SGD

It's a troubled business, but what exactly is happening? Surely their 60 stores in Malaysia/Vietnam/Indo/Myanmar are not worth 0!?

In retail biz model, the leverage isn't on bank debt, but on suppliers' "debt". A quick check on 1H report.

Net Cash 107 mil vs supplier "debt" of 81 mil with Payables 184 mil, Receivables is 39 mil, and Inventories 64 mil. Please bear in mind that, no discount usually for payables, but write-down is possible for inventories, and receivables

(not vested, but share a quick view)

CF, where and what actually is the supplier debt of 81 mio in The balance sheet?

Thanks.

I should use the proper term, it is the negative working capital been leveraged by the company

WC = Receivable + Inventory - Payable = 39 + 64 - 184 = -81 mil

(I rounded all numbers. It is not accuracy counts, but the concept)
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#18
(18-02-2016, 09:16 PM)CityFarmer Wrote:
(18-02-2016, 08:39 PM)Greenrookie Wrote:
(18-02-2016, 08:27 PM)CityFarmer Wrote:
(18-02-2016, 03:54 PM)frus Wrote: Ok, it's official Parkson Retail Asia is worth <0 (adjusted for cash)

Market cap based on last trade: 115m SGD
Net Cash (as per last report): 120m SGD

It's a troubled business, but what exactly is happening? Surely their 60 stores in Malaysia/Vietnam/Indo/Myanmar are not worth 0!?

In retail biz model, the leverage isn't on bank debt, but on suppliers' "debt". A quick check on 1H report.

Net Cash 107 mil vs supplier "debt" of 81 mil with Payables 184 mil, Receivables is 39 mil, and Inventories 64 mil. Please bear in mind that, no discount usually for payables, but write-down is possible for inventories, and receivables

(not vested, but share a quick view)

CF, where and what actually is the supplier debt of 81 mio in The balance sheet?

Thanks.

I should use the proper term, it is the negative working capital been leveraged by the company

WC = Receivable + Inventory - Payable = 39 + 64 - 184 = -81 mil

(I rounded all numbers. It is not accuracy counts, but the concept)

Yup thanks! I am not number crazy, concept far more important
life goes in cycles, predictable yet uncontrollable; just like the markets, but markets give you a second chance
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#19
When calculating cash flow, I tend to use OCF before WC - taxes - Capex as a gauge. This is because working capital can be lumpy. From this basis, based on last FY or extrapolating this 6 months result, business is negative cash flow generating/barely able to support its high dividends (or even 1 cents).
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#20
I guess CF is saying that Payables-Receivables-Inventories=81m. ie the payables are debt.

Yes, that's right, although most people would call it working capital and excluded from the net debt calculation. Except for a liquidation scenario (which is not in question as far as I know) that doesn't matter too much, but good point!
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