May be boosted by share price appreciation of PRG. Given the strong share price correlation of 0.9 between Parkson Retail Group (PRG) and Parkson Holdings (PHB), we believe the latter’s strong uptrend was mainly driven by the buoyant performance of the former. Since end-December 2009, PRG’s share price has surged some 15% while PHB has appreciated by some 20% over the same period. At the same time, PHB and PRG’s share prices hit their highs (since mid-2008) of RM6.20 and RMB14.86 respectively yesterday (see Figure 1).
Raising Target Price to RM7.06. We are maintaining our BUY recommendation at a higher TP of RM7.06 as we roll over our valuation to FY11 ending June from our previous CY10 base. Our TP is based on a RNAV of 24x PE for its China operation, 12x PE for its Malaysia operation and 10x PE for both Vietnam and the excluded stores.