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雷达卡
re-rating and potential earnings risks. We see value
in NWDS and Springland. We have counter
consensus views on two major structural debates.
Downgrade industry view to In-Line given recent
industry re-rating and potential earnings risks…
Golden Eagle and Intime have been our industry top
picks given their fundamental strengths. Both have
recently re-rated given market expectations of SSSG
recovery in the next six months. However, readings
from our proprietary property price trackers for each
retailer suggest modest SSSG recovery next 3-6 months
and we see earnings risks to 2013 consensus; making
their near-term risk/rewards less attractive. We
downgrade both stocks to EW. Parkson’s restructuring
efforts in a slower growth environment may prove
difficult – downgrade to UW.
…and we see deep value with company-specific
catalysts for NWDS and Springland: Both companies
have structural catalysts that warrant improving
valuations. For NWDS, there is >25% FY13 earnings
upside from consensus estimates if it fully achieves its
guidance. Springland is smaller in scale than Intime, but
has higher sales productivity, margins and cash flow.
Two other long-term structural debates: (i) Is there
an oversupply of retail space? and (ii) are shopping
malls better than department stores? We remain
positive on the industry in the medium term given our
counter consensus views. Slower real estate
investment growth will delay project launches. There will
be an abundance of mid-range/low-end retail supply
rather than mid-range /high-end given changing retail
dynamics. Some HK-listed chains are more competitive
hybrid mall/department stores in the effort to gain share.
2012-11-23_摩根士丹利亚洲_China Dept. Stores：Asia Insight, Seeking Value in a M.pdf
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