Update On Parkson Holdings Earnings

Parkson Holdings.

If I remember correctly, many had argued that it was ok to buy Parkson Holdings based on more than 50x times earnings because for Parkson case was special. Special because it had an incredible growth story.

Now what if the earnings growth is gone? Is this not possible?

A couple of months ago, on 25 Feb 2009 Quarterly rpt on consolidated results for the financial period ended 31/12/2008

Parkson announced that it made 104 million.

Today? It's earnings fell to just 75.935 million.

How now?

Still can consider as a growth stock?

Or should one twist and turn and rebrand Parkson as a value stock?

LOL!

Last November 2008, I wrote A Quick Look At Parkson Holdings Earnings and Reply To Comment On Parkson Holdings and I highlighted the issue on receivables and borrowings.

I wrote the following.....................................

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Here's my reason why I think it's unreal.

a. Last I checked, Parkson Holding is a retail business and in the economics of a retailing business, I cannot understand how Parkson can even have receivables. What exactly are they selling on credit? Who OWES Parkson Holdings so much money? And why? I for one cannot see no logic in why a retailer would even have a receivables account!

b. The size of the receivables. At 451.349 million, the figure is insane. It's simply too high! In a short span of 3 months, the receivables jumped 175.804 million!!!!!

Now try not to think about stocks for a moment. Indulge with me for a moment.

Think of a real life normal business where you and your business associate has setup. And imagine you went on a holiday and upon your return, your partner shows you the accounts and you find out that suddenly so many people owe you so much money. How? Wouldn't you not be concerned? Wouldn't you find it so unreal?

I do not know about you but I write what I feel. And in this instance, for Parkson Holdings, I find it so unreal.

Borrowings. I find the amount of borrowings Parkson Holdings is unreal too. Yes, in my flawed opinion, it's in my opinion that Parkson Holdings is too unrealistically high for me to consider Parkson Holdings as an investment grade stock. Do understand that for the borrowing issue, this is my own opinion, which like I said it is obviously flawed, hence, I do hope you take my view points stated here with a pinch of salt. And since I have repeatedly said that I am no investment advisor, I do hope you take all these comments as a mere second opinion and if you disagree, it's your rights to do so.

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Let's see the current receivables as reported in Parkson's earnings today.

Ahem.

Receivables is now at 807.282 million!!!!!!!!!!

oO

And the loans?

If the business is truly making good money, why are the loans still increasing?

Its total loans as reported is now some 2.116 Billion! Last November it was 2.061 Billion!

Some would say that the Lion group sure love building up its total loans!

Yeah the earnings growth looks gone. No worries. The loan growth and the receivables growth are still intact!

LOL!

:p2

So don't worry, just be happy and just buy. :p2

Yeah, them wise ones would say all bad news are already priced in!