ALERT Thailand Robinson Department Store (ROBINS.BK/ROBINS TB)* 1Q15 earnings review: Beat our forecast by 10.8% Outperform‧Maintained Price as of 15 May 2015 45.75 12M target price (Bt/shr) 66.00 Unchanged / Revised up (down) (%) Unchanged Upside/downside (%) 44.30 Key messages ROBINS reported a 1Q15 net profit of Bt615mn, up 14.1% YoY and 3.3% QoQ. The result beat our forecast by 10.8% and the Bloomberg consensus by 5.7%. Though weak sentiment in department store business should continue, an anticipated pickup in demand in 2H15 should allow 2015 SSSG to rebound 3.5% from a drop of 5.8% in 2014. In addition, ongoing expansion would help 2015 sales grow 9.2% YoY to Bt26.0bn. Meanwhile, a high occupancy rate of over 90.0% in rental area at its Lifestyle format should allow rental fees to increase 9.4% YoY and boost 2015 net profit 23.9% YoY to Bt2.3bn. We maintain a rating of Outperform on the counter with a target price of Bt66.00. Event ROBINS reported a 1Q15 net profit of Bt615mn, up 14.1% YoY and 3.3% QoQ. The result beat our forecast by 10.8% and the Bloomberg consensus by 5.7%. lmpact Though a decline in tourists in some locations such as Phuket and sluggish economy caused same store sales growth (SSSG) to drop to -6.6%, low impact from cannibalization and fullyear operations of new stores helped keep 1Q15 sales flat at Bt6.0bn, from Bt5.9bn in 1Q14. In addition, substantial rental fee growth of 41.0% YoY, thanks to a high occupancy rate, helped offset a drop in gross profit margin (GPM) to 24.7%, from 25.1% in 1Q14, and allowed 1Q15 earnings to increase to Bt615mn. Going forward, weak sentiment in department store business should continue but an anticipated pickup in demand in 2H15 should allow 2015 SSSG to rebound to 3.5% from a drop of 5.8% in 2014. In addition, ongoing expansion would help 2015 sales grow 9.2% YoY to Bt26.0bn. Meanwhile, a high occupancy rate of over 90.0% in rental area at its Lifestyle format should allow rental fees to increase 9.4% YoY and boost 2015 net profit 23.9% YoY to Bt2.3bn. Valuation & action With the better than expected 1Q15 earnings and a strong earnings outlook in 2015, we maintain a rating of Outperform on the counter with a target price of Bt66.00. Risks A slower than expected economic recovery. Nat Panassutrakorn 66.2658.8888 Ext. 8849 [email protected] 1Q15 earnings beat our forecast by10.8% Bt mn Revenue Cost of Goods Sold Gross Profit Operating Expenses Other incomes Operating Profit Operating EBITDA Interest Expense Net Investment Income/(Loss) Pre-tax Profit Current taxation Minorities Net Profit EPS (Bt) Percent Gross margin SG&A/sales 1Q15 6,036 (4,545) 1,491 (1,629) 849 711 1,995 18 118 811 (142) (54) 615 0.55 1Q15 24.7 27.0 1Q14 5,941 (4,447) 1,494 (1,449) 602 647 1,794 1 92 739 (130) (70) 539 0.49 1Q14 25.1 24.4 YoY (%) 1.6 2.2 (0.2) 12.4 41.0 9.8 11.2 1,471.7 27.7 9.8 9.3 (22.2) 14.1 14.1 YoY (ppts) (0.4) 2.6 4Q14 QoQ (%) 6,680 (9.6) (5,031) (9.7) 1,649 (9.5) (1,805) (9.8) 872 (2.7) 716 (0.6) 2,224 (10.3) 16 8.0 96 23.3 795 2.1 (140) 1.7 (60) (9.3) 595 3.3 0.54 3.3 4Q14 QoQ (ppts) 24.7 0.0 27.0 (0.0) Comments Showed flat growth due to weak sentiment Rental space increases as stores expand Pick ups in the performances at Super Sport and Power Buy Beat our forecast and Bloomberg Consensus by 10.8% and 5.7% Dropped due to high marketing campaigns Increased from pre-opening store expense Source: KGI Research May 18, 2015 *The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT <GO> Please see back page for disclaimer 1 Thailand Robinson Department Store Quarterly Income Statement Ju n -12A Sep -12A D ec-12A M ar-13A Ju n -13A Sep -13A D ec-13A M ar-14A Ju n -14A Sep -14A Dec-14A M ar-15A 5,004 (3 ,7 6 2 ) 1,242 (1,130) 424 535 891 1,426 102 637 (1 1 3 ) (4 9 ) 474 0 .4 5,204 (3 ,9 7 7 ) 1,227 (1,193) 439 473 803 1,277 60 534 (1 0 1 ) (5 3 ) 380 0 .3 6,341 (4 ,7 5 8 ) 1,583 (1,446) 624 761 1 ,1 8 3 1,943 115 875 (5 6 7 ) (6 8 ) 240 0 .2 6,305 (4 ,8 1 2 ) 1,493 (1,291) 474 676 1 ,0 5 2 1,729 80 756 (1 3 4 ) (7 0 ) 552 0 .5 5,560 (4 ,1 7 4 ) 1,386 (1,351) 492 526 820 1,346 40 40 75 561 (1 0 2 ) (5 1 ) 407 0 .4 5,869 (4 ,4 7 4 ) 1,395 (1,433) 516 478 880 1,358 (40) (4 0 ) 90 609 (9 3 ) (5 1 ) 465 0 .4 6,567 (4 ,9 2 7 ) 1,640 (1,611) 615 643 1 ,3 4 8 1,992 114 757 (1 2 6 ) (6 8 ) 562 0 .5 5,941 (4 ,4 4 7 ) 1,494 (1,449) 602 647 1 ,1 4 6 1,794 1 1 92 739 (1 3 0 ) (7 0 ) 539 0 .5 5,500 (4 ,1 5 4 ) 1,346 (1,492) 620 473 993 1,466 9 9 121 585 (9 9 ) (4 6 ) 440 0 .4 5,774 (4 ,4 2 0 ) 1,355 (1,581) 624 397 696 1,093 14 14 95 478 (7 9 ) (4 7 ) 353 0 .3 6,680 (5 ,0 3 1 ) 1,649 (1,805) 872 716 1 ,5 0 8 2,224 16 16 96 795 (1 4 0 ) (6 0 ) 595 0 .5 6,036 (4 ,5 4 5 ) 1,491 (1,629) 849 711 1 ,2 8 3 1,995 18 18 118 811 (1 4 2 ) (5 4 ) 615 0 .6 In co m e Statem en t (B t m n ) R ev en u e C o st o f G o o d s So ld Gro s s Pro f it Op eratin g Ex p en s es O ther inco m es Op eratin g Pro f it D ep reciatio n o f fix ed assets Op eratin g EB IT DA No n -Op eratin g In co m e Interest Inco m e O ther N o n-o p Inco m e No n -Op eratin g Ex p en s es Interest Ex p ense O ther N o n-o p Ex p enses N et Inv estm ent Inco m e/(Lo ss) Pre-tax Pro f it C urrent tax atio n M ino rities Ex trao rd inary item s Net Pro f it EPS (Bt) M arg in s (% ) G ro ss p ro fit m arg in O p erating m arg in O p erating EBITD A m arg in N et p ro fit m arg in Gro w th (% ) Rev enue g ro w th O p erating g ro w th O p erating EBITD A g ro w th N et p ro fit g ro w th 2 4 .8 1 0 .7 2 8 .5 9 .5 2 3 .6 9 .1 2 4 .5 7 .3 2 5 .0 1 2 .0 3 0 .6 3 .8 2 3 .7 1 0 .7 2 7 .4 8 .7 2 4 .9 9 .5 2 4 .2 7 .3 2 3 .8 8 .1 2 3 .1 7 .9 2 5 .0 9 .8 3 0 .3 8 .6 2 2 .3 1 5 .1 1 8 .7 2 3 .7 2 0 .3 3 .6 5 .7 3 .0 2 4 .1 3 6 .6 4 9 .0 (2 1 .0 ) 2 4 .3 4 .0 4 .6 (2 .2 ) 1 1 .1 (1 .7 ) (5 .6 ) (1 4 .2 ) 1 2 .8 1 .0 6 .4 2 2 .5 3 .6 (1 5 .4 ) 2 .5 1 3 3 .9 2 5 .1 1 0 .9 3 0 .2 9 .1 2 4 .5 8 .6 2 6 .6 8 .0 2 3 .5 6 .9 1 8 .9 6 .1 2 4 .7 1 0 .7 3 3 .3 8 .9 2 4 .7 1 1 .8 3 3 .0 1 0 .2 (5 .8 ) (4 .3 ) 3 .8 (2 .3 ) (1 .1 ) (1 0 .1 ) 8 .9 8 .2 (1 .6 ) (1 7 .0 ) (1 9 .5 ) (2 4 .2 ) 1 .7 1 1 .3 1 1 .7 5 .9 1 .6 9 .8 1 1 .2 1 4 .1 Source: KGI Research KGI Locations China Shanghai Room 1907-1909, Tower A, No. 100 Zunyi Road, Shanghai, PRC 200051 Shenzhen Room 24D1, 24/F, A Unit, Zhen Ye Building, 2014 Bao’annan Road, Shenzhen, PRC 518008 Taiwan Taipei 700 Mingshui Road, Taipei, Taiwan Telephone 886.2.2181.8888 ‧ Facsimile 886.2.8501.1691 Hong Kong 41/F Central Plaza, 18 Harbour Road, Wanchai, Hong Kong Telephone 852.2878.6888 Facsimile 852.2878.6800 Thailand Bangkok 8th - 11th floors, Asia Centre Building 173 South Sathorn Road, Bangkok 10120, Thailand Telephone 66.2658.8888 Facsimile 66.2658.8014 KGI's Ratings Rating Definition Outperform (OP) The stock's excess return* over the next twelve months is ranked in the top 40% of KGI's coverage universe in the related market (e.g. Taiwan). Neutral (N) The stock's excess return* over the next twelve months is ranked in the range between the top 40% and the bottom 40% of KGI's coverage universe in the related market (e.g. Taiwan).1.3 Under perform (U) The stock's excess return* over the next twelve months is ranked in the bottom 40% of KGI's coverage universe in the related market (e.g. Taiwan). Not Rated (NR) The stock is not rated by KGI Securities. Restricted (R) KGI policy and/or applicable law regulations preclude certain types of communications, including an investment recommendation, during the course of KGI's engagement in an investment banking transaction and in certain other circumstances. Excess return = 12M target price/current priceNote Disclaimer May 18, 2015 When an analyst publishes a new report on a covered stock, we rank the stock's excess return with those of other stocks in KGI's coverage universe in the related market. We will assign a rating based on its ranking. If an analyst does not publish a new report on a covered stock, its rating will not be changed automatically. KGI Securities (Thailand) Plc. ( “The Company” ) disclaims all warranties with regards to all information contained herein. In no event shall the Company be liable for any direct, indirect or any damages whatsoever resulting from loss of income or profits, arising by utilization and reliance on the information herein. All information hereunder does not constitute a solicitation to buy or sell any securities but constitutes our sole judgment as of this date and are subject to change without notice. *The Company may be issuer of Derivative Warrants on these securities. http://research.kgi.com; Bloomberg: KGIT <GO> Please see back page for disclaimer 2
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