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Thanks, F@@L. Hopefully FY2024 will be PHB's turn to be profitable. Let's keep an eye on the list of assets parked under PHB; if there are potential changes to its CGU throughout FY2024.
*Examining Cashflow Against Parkson Retail Group's Earnings*
One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'.
As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking.
Over the twelve months to December 2023, Parkson Retail Group recorded an accrual ratio of -0.21. Therefore, its statutory earnings were very significantly less than its free cashflow. In fact, it had *free cash flow of CN¥930m* in the last year, which was a lot more than its *statutory profit of CN¥66.4m*. Given that Parkson Retail Group had negative free cash flow in the prior corresponding period, the trailing twelve month result of CN¥930m would seem to be a step in the right direction.
Thanks, AC. Looking at the latest PHB report, it is now confirmed that the impairment entry of ~83M in Q4'23 was indeed coming from the Qingdao properties whereby the goodwill for these properties amounted to 63.5M :) Shareholders can confirm this from the list of group properties in page 230 line item #1. The shopping complex and offices have been disposed / ceased control over the assets / transaction closed and what is left is only an apartment :)
absolutely sure, Chong. You can compare FY22 AR and FY23 AR. The first line item under the list of group properties is the Qingdao asset details. You will notice the changes on this line item :)
FY2023 is the first profitable fiscal year for PRG since 2015/2016, AC :) We should be seeing profitable FY2024 for PRG again based on the on-going efficiencies actions from the group + economic situation that you mentioned :) We want to see PHB returning to black hopefully starting FY2024 since PRA and PRG are both profitable now.
In term of the liquidity of PRG, I checked and noted that in 2020 and 2021, PRG was in Net Current Liabilities position. But for 2022 and 2023, PRG had really improved and in Net Current Assets Position
Key points for PRG
EPS: CNY0.025 (up from CNY0.15 loss in FY2022)
Revenue: CNY4.10b (up 10% from FY2022)
Net Income: CNY66.4m (up CNY450.0m from FY2022)
Profit Margin: 1.6% (up from net loss in FY2022). The move to profitability was primarily driven by higher revenue
Like-for-like sales growth: 7.1% vs FY2022
Over the last 3 years on average, EPS has increased by 17% per year but PRG share price has fallen by 23% per year, which means it is significantly lagging earnings. IT IS UNDERVALUED!
Thanks, AC and F@@L. No doubt about it :) After years of operating losses, both PRA and PRG / the group is now in good position. Looking forward to the AGM / message from the board.
PRG's BOD meeting on 23rd May to review and approve Q1'24 performance :) China's consumer discretionary ETF is moving up strongly along with FTSE A50; with consumer sector being the heavyweight sectors in A50 :)
FTSE KLCI has a different landscape, tim foo. The heavyweight sectors in KLCI index is the financial sector - banks which is slightly more than 30% weightage. First glance - financial services as the major economy for Malaysia based on the KLCI index :p
Nothing much going on yet until the week of 23rd May onwards :) And shareholders just need to keep an eye on possible changes to its CGU for the rest of the fiscal year 2024; to keep an eye on possible annual impairment entry which is typically done in Q4 :)
Have a little patience, restart. While I am not the longest here but I can say its been a good investment from Parkson for me in both instances - once during covid and it spiked to 0.30 and currently second time in Parkson turnaround journey; i started at 0.145 and currently zero cost. Have faith in your own plans.
Lol, TL Bo. Of course "funds" that you mentioned are not stupid regardless whether you bought it or not. I am assuming you are referring to operator. I agree with you either guard it silently or choose other good stocks that you deemed is good. Go for it if you find other good stocks :)
Congrats, TL Bo. Keep it up! There's another trader here that is on par with you - Fatty Boom; also earning in every stock. Both of you may be trading the same stocks in future and can exchange opinions.
Thanks for sharing, 听见股市. PRA has been profitable for the last 3 fiscal years :) The balance sheet is getting stronger and the latest results showing net current liabilities of RM13.4M versus net current liabilities of RM102M 3 years ago. PRG reported the first full profitable fiscal year in FY2023. PRG's balance sheet showing similar strength whereby it was net current liabilities of RMB1.7bil in FY2021 and net current asset of RMB193M in FY2023 :)
Ooh yeah as for PHB: Its was net current liabilities of RM1.5bil in FY2021 and net current asset of RM11M in FY2023 based on the recently released annual report :)
ya cheng. pra everything looks good. now we look forward to prg first quater result which being contributed by two new mall . (mianyang and 莲塘) officially opening beginning of 2024. which just in time for their people to shopping for cny.
Agreed, 听见股市. No new malls for PRA and PRG planned for current fiscal years and we just need to keep an eye on changes to its CGU that could further derail PHB's return to black from reporting perspective.
CGU = cash generating unit; assets that generates cash and it has goodwill/netbook value to it, F@@L. PHB impaired Qingdao properties netbook value/goodwill in Q4'23 when the sale transaction was completed / ceases control over the properties. So, we need to keep an eye if there are any changes to the list of group properties that could affect/lead to annual impairment exercise again :)
the qing dao property was early proposed to dispose during year end of 2022 and completed at 2023. If you study the report 2022. you will know management anyhow need and must include the impairment at financial year 2023. so the q4 2023 impairment can actuallly be well predicted when investor notice q1 q2 and q3 report didnt have it.
for the whole 2023. there is no any new disposal or acquisition. so less likely to have impairment again for phb coming q1
and also because of impairment. it affected last figure showed in the report of parkson. but the important thing is, we shuld know impairment doesnt affect the organic profit. which its business is really doing good. so once the true profit revealed, market will notice parkson is only pe 4 or 5 based on fiscal year 2023. so how much the real pe parkson worth. its very exciting to see especialy on 29 may after phb release its first quater result.
how to wake a undervalue stock?first , it must be reaally a under value stock based on earnings or asset.secondly it must have somethings to catch the eye of investor.
its either.
1) a superb qr result.
2) some big boss or media say it is undervalue.
3) privatisation
4) announce a very good dividend.
any one of this happen den will be like一支穿云箭，千军万马来相见. otherwise. it will continue sleeping
no doubt. parkson is kind of undervalue. and it is sleeping. no ppl got interest on thiss share. especially malaysian. 8 out of 10 malaysia when u tell them to buy parkson share. their first respond is like parkson can meh? closing so many outlet.
nobody can wake parkson. even management itself. watever they say.people got no confidence on them because continuos 7 to 8 years business loss.
so the best thing to wake parkson is a superb qr. let the profit talk .
What I heard from Cheng who sound like jealous other traders earned in money in bursa market. Btw I am mid-long term investor not trader as you. If you hold from 2021 onwards, should earn a few hundred percents in a few stocks and the best was Genetec 0.05-40.
About the fatty boom I am not sure who is it, to be honest no time to see others comment here like you hahaha. Hope your parkson can bring us fly.
Cheng is the coolest and most generous gentleman in the room sharing so much important information about and insights into this company impartially... I'm deeply grateful for that
xiaoming. whole market of hk currently at the historical low of pe 10. already bear for 4 years. it is the cheapest market now among all.
and for parkson sg. pra is in the watchlist of sgx. only when it succesfuly exit. then it can enjoy higher pe. i guess pra will meet the requirment and exit the watchlist not later than dec 2024
fool last time i saw u mention their gross profit margin increase and stablelize at double digit. actually partially is because of the ifrs 16 new accouting standard. as part of the rental expenses was separated out and stated in lease interest
but no worry , gross profit is still increase even compare with the same accouting standard. operating profit margin would be 10% using the previous standard 2019. so overall is still increase.
thought wanna sit tight and wait for the rise, but now after reading all big brothers comment, tomorrow sure my hand will itchy and top up ticket somemore.... XD
