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Find the best China retail player during eco
China retail – Department Stores
September - October 2012
Sarah Xing – NIHK+852 2252 [email protected]
See Appendix A-1 for analyst certification, important disclosures and the status of non-US analysts.
Any authors named on this report are research analysts unless
otherwise indicated.
Equity Researchonomic downturn
s & Brand Retailers
Source: Bloomberg, Nomura estimates, closing price here and throughout this presentation as at Sep 21 2012, unless
Valuation table for China retail companies
Name Bloomberg ticker
Nomura rating
Market cap
(US$mn)Closing price CY12F
Brands:SportswearAnta Sports Products 2020 HK N.R. 1,763.1 5.48 8.0China Dongxiang Group 3818 HK N.R. 628.5 0.88 14.6Li Ning 2331 HK N.R. 553 4.06 naPeak Sport Products 1968 HK N.R. 349 1.29 4.7XTEP International Holdings 1368 HK N.R. 724 2.58 5.1361 Degrees International 1361 HK N.R. 517 1.94 3.6 Mcap Weighted Average 7.7
Brands:FootwearBelle International Holdings 1880 HK Buy 15,427 14.18 21.6 Daphne International Holdings 210 HK Buy 1,672 7.87 13.8 Le Saunda Holdings 738 HK N.R. 174.0 2.11 8.2C.banner International 1028 HK N.R. 691.4 2.68 13.6Mcap Weighted Average 20.4
Brands: ApparelBosideng International Holdings 3998 HK N.R. 2,262 2.19 9.8 Trinity 891 HK Buy 1,185 5.35 16.6 China Lilang 1234 HK Reduce 678.4 4.38 6.4Boshiwa International Holding 1698 HK N.R. 449.7 1.68 6.8Ports Design 589 HK Neutral 442 6.15 7.2 Giordano International 709 HK N.R. 1,238 6.23 12.5 IT 999 HK Buy 508.5 3.21 7.2Evergreen International 238 HK N.R. 190.9 1.56 6.9YGM Trading 375 HK N.R. 362 16.92 8.2 Glorious Sun Enterprises 393 HK N.R. 310 2.27 13.4 Embry Holdings 1388 HK N.R. 206.1 3.86 11.0Mcap Weighted Average 10.5
P/E
1
otherwise noted.
Net Margin(%)
CY13F CY12F CY13F CY12F CY13F CY12F CY13F CY12F CY13F CY12F CY12F
10.1 1.6 1.5 3.9 4.8 7.9 6.3 20.9 15.5 17.7 n.cash13.5 0.6 0.5 na na 3.5 4.1 3.5 3.5 13.9 n.cashna 1.0 1.0 7.3 4.3 0.7 1.4 1.3 4.2 (0.5) 3.05.0 0.5 0.5 na na 6.2 5.7 11.1 10.3 13.7 n.cash6.1 1.0 1.0 2.2 2.6 9.7 7.9 21.8 16.3 16.3 n.cash3.4 0.6 0.6 0.4 0.4 12.7 13.3 20.4 19.8 16.2 n.cash8.6 1.1 1.0 3.6 3.6 7.1 6.4 15.4 12.7 14.3
18.1 4.3 3.6 13.7 11.1 1.4 1.7 22.6 22.7 14.1 n.cash11.6 2.7 2.2 7.0 5.3 2.4 3.0 23.7 24.0 10.0 n.cash7.7 na na na na 5.5 6.0 13.5 13.0 9.9 n.cash10.6 na na 8.3 6.6 1.8 2.4 na na 12.5 n.cash17.1 4.1 3.5 12.9 10.4 1.6 1.9 22.6 22.7 13.6
9.3 1.9 1.8 6.2 5.5 7.4 7.5 19.6 19.6 15.8 n.cash14.5 2.6 2.5 11.0 8.8 4.3 5.0 16.6 18.3 17.9 n.cash8.0 1.7 1.7 3.1 3.7 10.2 8.2 29.7 21.9 21.8 n.cash5.4 0.8 0.7 1.8 1.4 4.3 6.4 na na 14.6 n.cash6.6 1.5 1.4 3.5 3.3 10.4 9.9 21.4 22.1 18.4 n.cash11.0 3.2 3.1 8.3 7.1 6.0 6.7 26.6 27.9 12.4 n.cash6.2 1.5 1.3 4.2 3.6 5.6 6.5 22.6 22.5 8.2 n.cash6.2 0.8 0.7 0.5 0.5 6.8 7.5 11.5 12.4 20.9 n.cash8.5 1.7 1.6 5.1 4.4 11.9 7.1 35.5 22.5 22.8 n.cash11.4 1.0 1.0 2.9 2.5 7.5 7.9 7.3 8.7 2.6 n.cash9.2 na na 7.3 6.1 2.8 3.4 11.0 12.0 7.1 n.cash9.6 2.0 1.9 6.1 5.3 6.9 7.0 21.4 20.6 15.4
P/B EV/EBITDA Div yld (%)E Net debt to equity (%)ROE(%)
Source: Bloomberg, Nomura estimates, closing prices here and throughout this presentation as at Sep 21 2012, unless
Valuation table of China retail companies
Name Bloomberg ticker
Nomura rating
Market cap
(US$mn)Closing price CY12F CY
Retailer: Department StoreParkson 3368 HK Neutral 2,353 6.49 14.1 12Golden Eagle 3308 HK Buy 3,730 14.96 19.0 16Intime 1833 HK Buy 2,123.3 8.23 18.0 15NWDS 825 HK Neutral 935.2 4.30 13.3 1Lifestyle International 1212 HK N.R. 3,438 16.02 14.2 12Maoye International 848 HK N.R. 970 1.40 8.4 7PCD Stores 331 HK N.R. 331.5 0.61 6.3 4Springland International 1700 HK N.R. 1,219.0 3.78 12.0 10Shirble 312 HK N.R. 232 0.72 5.9 5Mcap Weighted Average 15.0 13
Retailer: Jewelry and Watch RetailerChow Tai Fook 1929 HK N.R. 14,058 10.90 15.9 13Chow Sang Sang 116 HK N.R. 1,650 18.90 11.9 9Luk Fook 590 HK N.R. 1,888 24.85 11.4 10Hengdeli 3389 HK N.R. 1,258 2.22 9.8 8Mcap Weighted Average 14.7 12
Retailer: Home Appliance RetailerGome 493 HK N.R. 1,741 0.80 na 2Haier Electronic 1169 HK N.R. 2,760 8.78 10.2 8Mcap Weighted Average 10.2 13
P/E
2
s otherwise noted.
Net Margin(%)
Y13F CY12F CY13F CY12F CY13F CY12F CY13F CY12F CY13F CY12F CY12F
2.5 2.6 2.3 11.6 9.7 3.2 3.6 19.4 19.6 22.1 n.cash6.2 4.5 3.7 13.9 11.9 1.6 1.9 25.9 25.6 33.8 n.cash5.2 1.9 1.8 14.3 11.4 2.7 3.3 13.6 15.3 24.0 22.71.6 1.2 1.1 3.8 3.2 3.2 3.7 10.0 10.6 15.2 n.cash2.7 2.8 2.5 10.3 9.2 2.9 3.2 21.2 20.9 33.6 5.0
7.6 1.0 0.9 7.1 6.4 4.0 4.8 11.7 12.2 19.8 51.9 4.9 0.9 0.9 3.5 2.8 5.6 6.9 13.2 15.2 23.7 n.cash0.3 1.7 1.5 6.2 5.3 3.3 3.9 14.7 15.6 15.8 n.cash
5.3 0.8 0.7 na na 5.6 6.0 14.1 13.9 15.2 n.cash3.0 2.7 2.3 10.9 9.3 2.8 3.3 18.9 19.2 26.6
3.2 3.2 2.7 12.0 9.9 1.6 1.6 23.2 21.9 10.5 n.cash9.7 1.8 1.6 9.9 7.9 2.9 3.6 15.4 16.7 5.5 28.4 0.2 2.4 2.0 8.3 7.2 3.4 3.9 23.4 21.0 9.6 n.cash
8.5 1.4 1.3 7.1 6.3 3.6 3.9 15.6 14.9 6.6 14.4 2.2 2.8 2.4 11.1 9.2 2.0 2.1 22.0 20.9 9.7
1.7 0.7 0.7 47.4 5.7 1.4 2.3 (1.1) 2.9 (0.4) n.cash8.5 3.1 2.3 4.9 4.1 1.0 1.2 35.7 31.4 3.1 n.cash3.6 2.2 1.7 21.4 4.7 1.1 1.6 21.4 20.4 1.7
P/B EV/EBITDA Div yld (%) Net debt to equity (%)ROE(%)
Source: Bloomberg, Nomura research
China retail stock performance – by subsec
3
ctors
● China retail companies have underperformed MSCI China Index YTD.
● Footwear Brands is the only subsector that has performed in line with MSCI China Index YTD, but it retreated QTD after gains in 1H12.
● The performances of Jewelry & Watch Retailers and Sportswear Brands have improved and outperformed the MSCI China index QTD.
● Home Appliance Retailer sand Department Stores remain weak QTD.
Source: Bloomberg, Nomura research
China retail stock performance – by compa
4
nies
Source: Bloomberg, Nomura research
China retail stock earnings revision – by su
5
ubsectors
● Downward earnings revision trend persists.
● The magnitude of earning revisions is correlated with sector share price performance, except for department stores.
● Department stores suffer more de-rating than other subsectors.
● De-rating of department stores sector reflects rising concerns about overall retail sales growth in China.
Source: Bloomberg, Nomura research
China retail stock performance – by compa
(120.0)
(100.0)
(80.0)
(60.0)
(40.0)
(20.0)
0.0
Life
styl
eX
tep
Chi
na L
ilang
Bos
iden
gD
aphn
eH
aier
Ele
ctro
nics
Bel
leN
WD
SG
iord
ano I.T
Trin
ityIn
time
Hen
gdel
iC
.Ban
ner
Em
bry
Mao
yeSt
ella
Gol
den
Eagl
eA
nta
Cho
w S
ang
San
gP
arks
onLu
k F
ook
Cho
w T
ai F
ook
Por
ts D
esig
n36
1 D
egre
esEv
ergr
een
PC
D s
tore
sYG
M T
radi
ngLe
Sau
nda
Pea
k S
ports
Glo
rious
Sun
Chi
na D
ongx
iang
Li N
ing
Gom
e
EPS change for FY12 (%) (YTD)
(100.0)
(90.0)
(80.0)
(70.0)
(60.0)
(50.0)
(40.0)
(30.0)
(20.0)
(10.0)
0.0
10.0
Em
bry
Life
styl
eD
aphn
eC
hina
Lila
ngG
iord
ano
Bosi
deng
Hai
er E
lect
roni
csB
elle I.T
NW
DS
Intim
eC
how
San
g S
ang
Trin
ityX
tep
Ste
llaC
.Ban
ner
Luk
Foo
kH
engd
eli
Gol
den
Eag
leP
arks
onC
how
Tai
Foo
kG
lorio
us S
unP
orts
Des
ign
361
Deg
rees
Mao
yePC
D S
tore
sE
verg
reen
Ant
aLe
Sau
nda
YGM
Tra
ding
Chi
na D
ongx
iang
Pea
k S
port
sLi
Nin
gG
ome
EPS change for FY13 (%) (YTD)
6
nies
(120.0)
(100.0)
(80.0)
(60.0)
(40.0)
(20.0)
0.0
20.0
Mao
yeX
tep
YGM
Tra
ding
Hai
er E
lect
roni
csB
elle
Chi
na L
ilang
Bos
iden
gLi
fest
yle
Intim
e36
1 D
egre
es I.T
Luk
Foo
kS
tella
Hen
gdel
iTr
inity
Cho
w T
ai F
ook
Ant
aC
.Ban
ner
Gio
rdan
oP
eak
Spo
rts
NW
DS
Dap
hne
Gol
den
Eag
leP
orts
Des
ing
Par
kson
Ever
gree
nC
how
San
g S
ang
Glo
rious
Sun
Chi
na D
ongx
iang
Li N
ing
Gom
e
EPS change for FY12 (%) (QTD)
(80.0)
(70.0)
(60.0)
(50.0)
(40.0)
(30.0)
(20.0)
(10.0)
0.0
10.0
YGM
Tra
ding
Hai
er E
lect
roni
csLu
k F
ook
Intim
eB
elle
Bos
iden
gC
hina
Lila
ngC
.Ban
ner
Life
styl
e36
1 D
egre
esC
how
Tai
Foo
kG
iord
ano
Dap
hne I.T
NW
DS
Trin
ityM
aoye
Stel
laH
engd
eli
Cho
w S
ang
San
gG
olde
n E
agle
Xte
pP
orts
Des
ing
Glo
rious
Sun
Par
kson
Ever
gree
nP
eak
Spo
rts
Ant
aC
hina
Don
gxia
ngLi
Nin
gG
ome
EPS change for FY13 (%) (QTD)
Financial performance comparison in 1H12
25.1
7.3
15.3
19.5
25.1
5.2
13.2
16.8
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Belle - Footwear Belle - Sportswear Daphne C.Banner
1H11 1H12
Operating profit margin comparison (%)
Source: Company filings, Nomura research
15.4
28.9
21.8
9.0 11.2
5.2
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Belle Daphne C.banner
Sales Operating profit
Sales and operating profit growth comparison (1H12) (%)
7
- Footwear
186
125
149
207200
143
202
239
0
50
100
150
200
250
300
Belle - Footwear Belle - Sportswear Daphne C.Banner
1H11 1H12
Inventory turnover days comparison
68.6
37.4
61.2 62.3
67.6
37.1
60.7 62.4
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
70.0
75.0
Belle - Footwear Belle - Sportswear Daphne C.Banner
1H11 1H12
Gross profit margin comparison (%)
Financial performance comparison in 1H12
16.2
22.0
1.8
9.7
21.9
1.8
14.7
32.8
3.8
10.1
23.7
(0.9)(5.0)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Trinity China Lilang Evergreen Ports Design China Outfitters Giordano
Sales Operating profit
Sales and operating profit growth comparison (1H12) (%)
21.6 23.1
29.2 26.3
44.2
14.3
21.4
27.3 23.5
21.6
39.7
12.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
Trinity China Lilang Evergreen Ports Design China Outfitters Giordano
1H11 1H12
Operating profit margin comparison (%)
Source: Company filings, Nomura research 8
- Apparel
80.8
36.4
66.9
81.6
75.5
59.7
79.7
39.7
68.3
81.9
76.6
58.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
Trinity China Lilang Evergreen Ports Design China Outfitters Giordano
1H11 1H12
Gross profit margin comparison (%)
361
49
320
635
325
70
409
59
430
681
399
60
0
100
200
300
400
500
600
700
800
Trinity China Lilang Evergreen Ports Design China Outfitters Giordano
1H11 1H12
Inventory turnover days comparison
Financial performance comparison in 1H12
(16.4)(11.6) (9.9)
1.4
(29.4) (28.5)
(86.3)
(18.6)
(32.1)
5.2
(80.9)
(40.8)
(100.0)
(80.0)
(60.0)
(40.0)
(20.0)
0.0
20.0
Li Ning Anta 361 Degrees Xtep China Dongxiang Peak Sports
Sales Operating profit
Sales and operating profit growth comparison (1H12) (%)
9.2
23.7
27.8
22.0 23.5 22.9
1.5
21.9 21.0 22.8
6.4
18.9
0.0
5.0
10.0
15.0
20.0
25.0
30.0
Li Ning Anta 361 Degrees Xtep China Dongxiang Peak Sports
1H11 1H12
Operating profit margin comparison (%)
Source: Company filings, Nomura research9
- Sportswear
45.0 42.8
41.1 40.9
61.2
39.9
44.2 41.8 42.7
40.9
50.1
37.7
30.0
35.0
40.0
45.0
50.0
55.0
60.0
65.0
Li Ning Anta 361 Degrees Xtep China Dongxiang Peak Sports
1H11 1H12
Gross profit margin comparison (%)
64
36 19
81
125
50
96
50 45
82
304
86
0
50
100
150
200
250
300
350
Li Ning Anta 361 Degrees Xtep China Dongxiang
Peak Sports
1H11 1H12
Inventory turnover days comparison
Financial performance comparison in 1H12
20.1
18.1 18.6
16.3
18.6
23.1
18.9 17.2
18.2 16.2
17.3
23.4
0.0
5.0
10.0
15.0
20.0
25.0
Golden Eagle Intime Parkson Maoye PCDS Lifestyle
1H11 1H12
Comprehensive gross profit margin for merchandise sales (%)
Source: Company filings, Nomura research
16.6 18.5
7.6 5.1
13.8 9.9
15.7 20.1
6.4
(0.6)
3.6
10.0
3.0
12.7
(17.2)
2.1
(29.0)
12.4
(40.0)
(30.0)
(20.0)
(10.0)
0.0
10.0
20.0
30.0
Golden Eagle Intime Parkson Maoye PCDS Lifestyle
GSP Sales Core-operating profit
GSP, Sales and operating profit growth comparison (1H12) (%)
10
– Department stores
20.0 18.0 18.7
17.3 18.2
22.3
19.0 17.3
18.3 17.1 17.2
22.5
0.0
5.0
10.0
15.0
20.0
25.0
Golden Eagle Intime Parkson Maoye PCDS Lifestyle
1H11 1H12
Concessionaire rate (%)
13.2
7.4
10.3
7.7
13.0
16.4
11.6
7.0 7.9 7.5
8.1
16.8
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
Golden Eagle Intime Parkson Maoye PCDS Lifestyle
1H11 1H12
Core operating profit to GSP (%)
Financial performance comparison in 1H12
9.8
6.3
(18.8)
5.3
(25.0)
(20.0)
(15.0)
(10.0)
(5.0)
0.0
5.0
10.0
15.0
Chow Sang Sang Hengdeli
Sales Operating profit
Sales and operating profit growth comparison (1H12) (%)
Source: Company filings, Nomura research
7.7
11.9
5.7
11.8
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Chow Sang Sang Hengdeli
1H11 1H12
Operating profit margin comparison (%)
11
– Jewelry & Watches
18.4
25.7
17.6
26.7
15.0
17.0
19.0
21.0
23.0
25.0
27.0
29.0
Chow Sang Sang Hengdeli
1H11 1H12
Gross profit margin comparison (%)
129
162 152
217
0
50
100
150
200
250
Chow Sang Sang Hengdeli
1H11 1H12
Inventory turnover days comparison
Financial performance comparison in 1H12
(22.4)
8.4
(1,901.1)
25.9
(2,000.0)
(1,500.0)
(1,000.0)
(500.0)
0.0
500.0
Gome Haier
Sales Operating profit
Sales and operating profit growth comparison (1H12) (%)
Source: Company filings, Nomura research
0.2
3.0
(5.2)
3.5
(6.0)
(5.0)
(4.0)
(3.0)
(2.0)
(1.0)
0.0
1.0
2.0
3.0
4.0
Gome Haier
1H11 1H12
Operating profit margin comparison (%)
12
– Home appliance
12.5 11.7
12.6
14.9
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
Gome Haier
1H11 1H12
Gross profit margin comparison (%)
58
10 12
74
14 15
0
10
20
30
40
50
60
70
80
Gome Haier Washing Machine and Water Heater
Haier Integrated Channel Services
1H11 1H12
Inventory turnover days comparison
Source: Nomura research
Summary of stock rating and TP under our
Name Stock code C(H
Brand: Footwear & ApparelBelle 1880 HK 14Daphne 210 HK 7I.T 999 HK 3Trinity 891 HK 5China Lilang 1234 HK 4Ports Design 589 HK 6Retail: Department storesIntime 1833 HK 8Golden Eagle 3308 HK 14Parkson 3368 HK 6NWDS 825 HK 4
13
coverage
CP TP Upside RatingKD) (HKD) (%)
4.18 16.60 17.1 BUY.87 11.50 46.1 BUY.21 6.30 96.3 BUY.35 6.40 19.6 BUY.38 4.10 (6.4) REDUCE.15 6.90 12.2 NEUTRAL
.23 11.00 33.7 BUY4.96 17.60 17.6 BUY.49 6.80 4.8 NEUTRAL.30 4.10 (4.7) NEUTRAL
Source: CEIC, Nomura research
Outlook for China retail trend
0.0
5.0
10.0
15.0
20.0
25.0
1Q03
2Q03
3Q03
4Q03
1Q04
2Q04
3Q04
4Q04
1Q05
2Q05
3Q05
4Q05
1Q06
2Q06
3Q06
4Q06
1Q07
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
y-y chang of total personal consumption y-y change of real personal consumption
Quarterly nominal and real personal consumption change
0
5
10
15
20
25
Jan-
08
Jun-
08
Nov
-08
Apr-
09
Sep-
09
Feb-
10
Jul-1
0
Dec
-10
May
-11
Oct
-11
Mar
-12
Retail Sales of Consumer Goods: YoY (%) Real Retail Sales of Consumer Goods: YoY (%)
Monthly nominal and real retail sales of consumer goods change
14
● Deceleration of nominal retail sale growth as well as real retail sales growth YTD
● Steady real personal consumption growth, supported by wage increases
● Rising portion of non-individual consumption in total retail sales of consumer goods
● Deceleration of non-individual consumption growth due to softening economic situation
0.0
5.0
10.0
15.0
20.0
25.0
0
2000
4000
6000
8000
10000
12000
14000
Average wages (Rmb) y-y change (%) (RHS)
Quarterly average wage change
Aug-
12
Source: CEIC, Nomura research
Outlook for China retail trend
(60.0)
(40.0)
(20.0)
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
Government revenue
Disposable income per capita for urban household
Industrial enterprise profits
Government, corporate and personal income growth (%)
89 87 83 80 84 84 83 81 77 77 77 76 77 74 71 68 67 67 63 60 55 54
11 13 17 20 16 16 17 19 23 23 23 24 23 26 29 32 33 33 37 40 45 46
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Individual consumption to total retail sales Non-individual consumption to total retail sales
Individual consumption vs non-individual consumption
15
(5.0)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
1H09 2H09 1H10 2H10 1H11 2H11 1H12
Parkson Golden Eagle Intime Maoye NWDS
SSSG trend of major department store players
M1-M0 change: Leading indicator of retail sales growth
China Department Stores – consolidation b
Source: Euromonitor, company data, Nomura research
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
China Hong KongJapan SingaporeSouth Korea USA
Internet retailing as % to total retailing sales by countries
0.0
5.0
10.0
15.0
20.0
25.0
2008 2009 2010 2011
Goldend Eagle IntimeParkson NWDSMaoye PCD stores
Unused prepaid card balance as % to GSP
enefits leading players
16
3.0
5.0
7.0
9.0
11.0
13.0
15.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
China Hong KongJapan SingaporeSouth Korea USA
Department sales as % to total retailing sales by countries
(50.7) (49.4)
28.5 31.2
(37.4)
(74.5)
(7.8)
(33.2)
44.0 46.7
(28.9)
(67.5)
(100.0)
(80.0)
(60.0)
(40.0)
(20.0)
0.0
20.0
40.0
60.0
Golden Eagle Parkson Intime Maoye PCD NWDS
Net gearing (%) Adjusted net gearing (%)
Net gearing ratio and adjusted net gearing ratio comparison
China Department Stores – consolidation b
Source: Euromonitor, company data, Nomura research
7.5
36.0
53.959.7
63.8
84.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
China Japan USA Singapore Hong Kong South Korea
Market share of top four department store players (2011)
Market share (%) of leading four players by country
1990 2010 changeJC Penney 1,312 1,106 (206)Kohl's 55 1,089 1,034Sears 867 894 27Macys 147 850 703Dillard's 87 324 237Bon Ton 33 275 242Nordstrom 59 204 145Saks Fifth Avenue 48 104 56Boscov's 50 39 (11)MAY 322 0 (322)Mervyn's 240 0 (240)Federated 220 0 (220)Broadway 88 0 (88)Total 3,528 4,885 1,357
Market consolidation of US department stores
enefits leading players
17
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2005 2006 2007 2008 2009 2010 2011
Parkson Beijing Wangfujing Golden Eagle Dashang Intime
Maoye NWDS Silver Plaza Rainbow Grandbuy
Market share of top ten department stores in China
52
38 38
2824
20
0
10
20
30
40
50
60
Parkson Maoye NWDS Intime Golden Eagle PCD
Number of stores
Number of stores for HK-listed department stores (2011)
China Department Stores – Summary of KP
Source: Company data, Nomura research
Golden Eagle Parkson IntimeStore position Upscale Upper-middle Upper-midd
Key markets Jiangsu Nationwide Zhejiang
Store portfolioNo. of self-operated stores 23 46 26Store age(yrs) 4.0 6.1 3.0Total GFA(sqm) 882,883 1,469,037 1,113,716 -GFA owned(sqm) 553,264 225,834 439,135 -GFA leased(sqm) 329,619 1,243,203 674,581GFA per store(sqm) 38,386 31,936 42,835Financail performanceGross sales proceeds of merchandise (RMBm) 14,280 15,626 11,416 Direct sales 1,120 1,502 1,137 Concessionary sales 13,160 14,125 10,279Avg. sales per sqm( RMB) 19,461 12,058 11,821
Merchandise comprehensive gross margin(%) 19.6 18.6 17.1Concessionaire rate(%) 19.6 18.7 17.2Direct sales gross margin(%) 20.2 17.5 16.6
Other income from suppliers as percentage to GSP of concessionare sales (%) 0.9 3.1 2.3
Major operating expenses as percentage to GSP (%) 8.6 13.8 14.5Staff costs 2.5 2.4 3.7Rental costs 1.1 4.2 3.2Depreciation costs 1.1 1.5 2.4Other operating costs 3.9 5.7 5.2
Staff costs analysisAverage annual GSP per staff (Rmb) 2.3 2.1 1.8Staff per 100 sqm GFA 0.7 0.5 0.7
Annual average costs per staff (Rmb) 55,441 50,568 61,308
Operating costs per sqm (Rmb)Rental costs 509 618 611Depreciation costs 189 180 287Other operating costs 657 686 352
Is for key players
18
Maoye PCD NWDSdle Middle to high-end Upscale Upper-middle
Guangdong, Sichuan, Hebei, Shangdong
Fujian, Guizhou, Beijing
Shanghai, Beijing, Liaoning, Hubei
36 15 324.0 2.5 6.4
1,058,136 337,305 1,088,420672,367 107,904 163263385,769 229,401 925,15729,393 22,487 34,013
10,430 4,810 10,7791,437 329 5468,993 4,481 10,23310,487 18,035 10,137
16.0 18.1 18.816.9 17.8 18.810.8 22.5 17.8
8.4 1.8 0.3
15.9 13.5 16.33.5 3.5 3.72.0 3.1 6.43.1 1.3 2.67.3 5.6 3.7
1.1 2.0 1.60.8 0.8 0.6
40,663 67,336 59,265
561 876 763323 243 260764 1,030 373
China Department Stores – Summary of KP
Source: Company data, Nomura research
0
20000
40000
60000
80000
100000
120000
2012E 2013E 2014E Average size per new store (2012-14)
Golden Eagle Intime Parkson NWDS*
Average size of new store opening (Sqm)
50
100
150
200
250
300
350
400
450
64 63
3932
15 15
36 37
6168
85 85
0
10
20
30
40
50
60
70
80
90
100
Maoye Golden Eagle Intime PCD NWDS Parkson
Owned properties Leased properties
China department stores owned/leased properties (%) (2011)
2
3
4
5
6
7
8
9
10
Is for key players
19
42,835
38,386
34,01331,936
29,393
22,487
0
000
000
000
000
000
000
000
000
000
Intime Golden Eagle NWDS Parkson Maoye PCD
Average GFA per store (sqm)
Average size per store comparison (2011)
68 63
4639
32 37
5461
0
10
20
30
40
50
60
70
80
90
00
Macy's Kohl's Nordstrom JC Penney
Owned stores Leased stores
US department stores owned/leased properties (%) (2010)
China Department Stores – Summary of KP
Source: Company data, Nomura research
Golden Eagle Parkson Intime Maoye PCD NWBeijing - 3 1 - 2 5Shanghai 1 4 - - - 9Tianjin - 1 - - - 1Chongqing - 3 - 1 - 1Inner Mongolia - - - - - -Liaoning - 4 - 1 1 5Jilin - - - - 1 -Heilongjiang - 1 - - - 1Hebei - 2 1 6 - -Shanxi - 2 - 1 1 -Henan - 1 - - - 1Hubei - - 6 - - 6Shandong - 3 - 7 3 -Jiangxi - 1 - - - -Hunan - 1 - - - 1Anhui 4 2 0 - - -Jiangsu 15 5 - 4 - 2Zhejiang - 1 17 - - 2Guangxi - 2 - - - -Fujian - - - - 5 -Guangdong - 1 - 7 - -Sichuan - 4 - 11 - 2Guizhou - 3 - - 6 -Yunnan 1 2 - - - 1Shaanxi 3 4 2 - 1 -Gansu - 1 - - - 1Qinghai - - - - - -Xinjiang - 1 - - - -Total 24 52 27 38 20 38Self-operated 23 46 26 36 15 34Management 1 6 1 2 5 4
Network of HK-listed department stores (2011)
Is for key players
20
63.0 62.5
30.0 28.9
23.7
9.6
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Intime Golden Eagle PCD Maoye NWDS Parkson
No. of stores at the core market vs total store number in China (%)
% of stores at single core market comparison
16.0
16.2
16.4
16.6
16.8
17.0
17.2
17.4
17.6
11.0 11.1 11.2 11.3 11.4 11.5 11.6 11.7 11.8 11.9 12.0 12.1
GE
Parkson
NWDS
PCDMaoye
Intime
Weighted
average of CA
GR
of retail sales
Weighted average of CAGR of disposable income per capita for urban household
(%)
(%)
Retail sales growth vs. disposable income growth analysis
DS59
5
6
22
2
844
China Department Stores – Summary of KP
Source: Company data, Nomura research
0
1
2
3
4
5
6
7
8
2007 2008 2009 2010 2011
NWDS* Parkson Golden Eagle
Maoye Intime PCD stores
Historical store portfolio age comparison
8.47.8
6.76.2
5.3
3.9
0
1
2
3
4
5
6
7
8
9
Parkson NWDS* PCD stores Maoye Golden Eagle Intime
ages of comparable stores (years)
Store portfolio age of comparable stores comparison (2011)
Is for key players
21
6.46.1
4.0 4.0
3.02.5
0
1
2
3
4
5
6
7
NWDS* Parkson Golden Eagle Maoye Intime PCD stores
Store age of store portforlio (years)
Store portfolio age comparison (2011)
53.8
73.3 73.5 70.955.7
38.1
15.0
6.5 2.4 7.9 35.3
16.9
31.320.2 24.1 21.2
9.0
45.0
0
10
20
30
40
50
60
70
80
90
100
NWDS* Golden Eagle Intime Parkson Maoye PCD stores
% of GFA for stores with over 2 years old% of GFA for stores with 1-2 years old% of GFA for stores with less than 1 years old
GFA breakdown by store age (%) (2011)
China Department Stores – Summary of KP
Source: Company data, Nomura research
8000
10000
12000
14000
16000
18000
20000
22000
24000
FY08 FY09 FY10 FY11
Golden Eagle (RMB) Parkson (RMB)
Intime (RMB) Maoye (RMB)
PCD (RMB) NWDS (HKD)
Comparison of GSP per sqm
2
2.5
3
3.5
4
4.5
FY08 FY09
Golden EagleIntimePCD
Staff cost as % of
0
0.5
1
1.5
2
2.5
3
3.5
FY08 FY09 FY10 FY11
Golden Eagle ParksonIntime MaoyePCD NWDS
Depreciation cost as % of GSP comparison
0
1
2
3
4
5
6
7
8
FY08 FY09
Golden EagleIntimePCD
Other operating costs a
Is for key players
22
FY10 FY11
ParksonMaoyeNWDS
GSP comparison
0
1
2
3
4
5
6
7
FY08 FY09 FY10 FY11
Golden Eagle ParksonIntime MaoyePCD NWDS
Rental cost as % of GSP comparison
FY10 FY11
ParksonMaoyeNWDS
as % of GSP comparison
2.5 3.5 2.4 3.7 3.5 3.71.1
3.1 4.2 3.22.0
6.4
1.1
1.3 1.5 2.43.1
2.6
3.9
5.6 5.75.2 7.3
3.7
0
2
4
6
8
10
12
14
16
18
Golden Eagle
PCD Parkson Intime Maoye NWDS
Staff cost as % of GSP(%)Rental as % of GSP(%)Depreciation as % of GSP(%)Other operating expense as % of GSP(%)
Operating costs as % of GSP breakdown
China Department Stores – Summary of KP
Source: Company data, Nomura research
0.4
0.5
0.6
0.7
0.8
0.9
1
1.1
1.2
FY08 FY09 FY10 FY11
Golden Eagle ParksonIntime MaoyePCD NWDS
Staff per 100 sqm GFA
1
1.2
1.4
1.6
1.8
2
2.2
2.4
2.6
FY08 FY09
Golden EagleIntimePCD
Average annual GSP
400
500
600
700
800
900
1000
FY08 FY09 FY10 FY11
Golden Eagle ParksonIntime MaoyePCD NWDS
Rental cost per sqm for leased GFA (CNY)
0
50
100
150
200
250
300
350
400
FY08 FY09
Golden EagleIntimePCD
Depreciation cost
Is for key players
23
FY10 FY11
ParksonMaoyeNWDS
P per employee (CNY m)
40,663
50,56855,441
59,265 61,30867,336
0
10000
20000
30000
40000
50000
60000
70000
80000
Maoye Parkson Golden Eagle
NWDS Intime PCD
Average annual payment per staff excluding share option (Rmb)
Average annual payment per employee in 2011 (CNY)
FY10 FY11
ParksonMaoyeNWDS
per sqm GFA (CNY)
0
200
400
600
800
1000
1200
1400
FY08 FY09 FY10 FY11
Golden Eagle ParksonIntime MaoyePCD NWDS
Other operating expenses per sqm GFA (CNY)
China Department Stores – store map of HK
Source: Company data, Nomura research
Mianyang
ChengduCho
Lanzhou
N
LuzhoZigong
GLiupanshui Z
Kunming
Na
Urumqi
In time (4)
Golden Eagle (3)
Parkson (2)
In time (1)
Parkson (1)
Parkson (1)Intime (1)
Maoye (6)
Maoye (1)
Intime (1)
Parkson (1)
NWDS (1)
In time (1)
In time (1)
Golden Eagle (1)
Parkson (2)
NWDS (1)
Parkson (1)
PCD Stores (4)
Parkson (1)
PCD Stores (1)
Parkson (1)
PCD Stores (1)
Maoye (1)
Parkson (1)
Parkson (3)
Maoye (1)
NWDS (1)
Parkson (2)
Maoye (6)
NWDS (1)
Maoye (2)
Parkson (1)
Maoye (2)
NWDS (1)
Golden Eag le (3)
Parkson (4)
In time (2)
PCD Stores (1)
Parkson (1)
NWDS (1)
Parkson (1) Parkson (1)
Parkson (3)
Intime (1)
PCD Stores (
NWDS (5)
Parkson (1)
NWDS (1)
Parkson (1)
Maoye (1)
Parkson (1)
Parkson (1)
NWDS (1)
Golden Eag le
NWDS (1)
Intime (1)
Parkson (2)
In time (1)
Parkson (2)
Maoye (1)
PCD Stores (1) Maoye (1)
K-listed department stores
24
Changchun
Harbin
Shenyang
Beijing
Tian jin Yantai
QingdaoJinan
Yancheng
Nanjing Shanghai
Ningbo
Taizhou
Xiamen
Shenzhen
Zhuhai
Nanchang
Xiangyang
Wuhan
Zhengzhou
Hefei
ongqing
Xi’an
Baoding
Changsha
Anshan
Dalian
Shijiazhuang
Qinhuangdao
Tangshan
Zhangjiakou
Taiyuan
ZiboLinyi
Heze
Changzhou
Wuxi SuzhouYangzhou
Xuzhou
Nantong
Huai’anSuqian
Hangzhou Zhoushan
WenzhouJinhua
Shaoxing
Huaibei
Xianning
EzhouXiantao
Suizhou
Yueyang
Shantou
anchong
ou
Guiyang
Zunyi
anning
Parkson (1)
NWDS (1)
Parkson (1)
Maoye (1)
PCD Stores (1)
NWDS (3)
Parkson (1)
NWDS(1)
Parkson (2)
NWDS (1)
Intime (1)
Maoye (5)
Parkson (1)
Parkson (1)
PCD Stores (3)
Maoye (1)
Golden Eagle (1)
Golden Eagle (1)
Golden Eagle (1)
Golden Eagle (1)
Golden Eagle (1)
Golden Eagle (1)
Golden Eagle (1)
Maoye (1)
NWDS (1)
Golden Eagle (2)
Golden Eagle (1)
Parkson (2)
Golden Eagle (1)
Parkson (1)
Maoye (2)
Golden Eagle (1)
Parkson (4)
NWDS (9)
Intime (5)
NWDS (2)
Intime (1)
Parkson (1)
Intime (6)
PCD Stores (5)
2)
PCD Stores (1)
Maoye (5)
Parkson (2)
Maoye (1)
Intime (1)
e (5)
Source: Company data, Nomura research
Intime (1833.HK, BUY, CP:HKD8.23; TP: HK
61%
23%
8%
4% 4%
Zhejiang Hubei Shaanxi Hebei Beijing
Store network breakdown by region
41,939 41,939
37,224 37,224
32,422 36,236
39,597 38,949 41,921
44,412
49,770 52,298
0
10,000
20,000
30,000
40,000
50,000
60,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E
Average GFA per store (sqm)
Average size per store
25
D11.00)
1.8 1.9
2.9 3.0 3.4 3.4
3.7
5.8
4.7
4.0 3.9
4.9 5.0 5.4
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2008 2009 2010 2011 2012E 2013E 2014E
Age of store portfolio on GFA (years) Age of comparable stores on GFA (years)
Age of store portfolio
100.0 100.0 100.0
37.6 37.6
18.5 25.8
37.5 37.0 39.4 45.7 45.8 49.6
0.0 0.0 0.0
62.4 62.4
81.5 74.2
62.5 63.0 60.6 54.3 54.2 50.4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E
Self-owned properties Leased properties
GFA breakdown by self‐owned properties and leased properties
Source: Company data, Nomura research
Intime (1833.HK, BUY, CP:HKD8.23; TP: HK
2.5
3.7
6.4
3.4 4.3
9.5
11.7 11.0
10.5 10.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E
Unused prepaid card balance to GSP (%)
Unused pre‐paid card balance as % to GSP
0
10
20
30
40
50
60
70
80
90
100
%
23.7
28.5
21.318.9
1.4
35.7
44.0
37.8 36.7
20.8
0
5
10
15
20
25
30
35
40
45
50
2010 2011 2012E 2013E 2014E
Net gearing (%) Adjusted net gearing(%)
Net gearing ratio and adjusted net gearing ratio
26
D11.00)
21 29
57
73 64 63 62 21
30
40 2 20 11
22 58
41
3
24 15
26 17
2008 2009 2010 2011 2012E 2013E 2014E
% GFA of comparable stores % GFA of 1-2 years old stores % GFA of less than 1 year old stores
GFA breakdown by store ages
(10,000)
(5,000)
0
5,000
10,000
Beginning balance Cash inflow Cash outflow Ending balance
Cash excluding unused balance of prepaid cardsCash inflow from business operation excluding prepaid cards balance Repayment of shareholder's loansRefinancingInteret incomeRepayment of CB and BondCapexDividend payment
(CN
Ym
)
Cash flow analysis for 2012‐14F
Source: Bloomberg, company data, Nomura research
Intime (1833.HK, BUY, CP:HKD8.23; TP: HK
0.00
10.00
20.00
30.00
40.00
50.00
60.00
Mar
-07
Jun-
07
Sep-
07
Dec
-07
Mar
-08
Jun-
08
Sep-
08
Dec
-08
Mar
-09
Jun-
09
Sep-
09
Dec
-09
Mar
-10
Jun-
10
Sep-
10
Dec
-10
Mar
-11
Jun-
11
Sep-
11
Dec
-11
Mar
-12
Jun-
12
(x)
Trading PE MeanMean + 1std Mean + 2stdMean - 1std Mean - 2std
P/E band with standard deviation
2010Net GFA additions (sqm) 35,000 26
SSSG (%) 18.2
Concessionaire rate (%) 17.8Gross profit margin for direct sales (%) 20.0Comprehensive merchandise gross margin (%) 17.9
Operating expenses to GSP ratio (%) 14.4Staff costs 3.4Rental costs 3.4Depreciation 2.7Utilities 1.4Promotion 0.8Others operating expenses 2.6
Effective tax rate (%) 24.3
Dividend payout ratio 39.6
Summary of k
6.0
7.0
8.0
9.0
10.0
11.0
12.0
27
D11.00)
2011 2012F 2013F 2014F63,000 198,000 454,000 350,000
23.1 10.5 15.5 15.5
17.2 16.9 16.8 16.716.6 16.2 16.2 16.217.1 16.8 16.7 16.6
14.5 15.3 15.3 15.63.7 3.6 3.4 3.33.2 3.5 3.4 3.42.4 2.8 3.1 3.41.2 1.3 1.3 1.51.1 1.0 1.1 1.12.9 3.0 3.0 3.0
24.0 25.0 25.5 25.5
40.3 40.0 40.0 40.0
ey assumptions
9.0%
9.9% 9.8% 9.7%
10.4%
11.7%
0%
0%
0%
0%
0%
0%
0%
FY09 FY10 FY11 FY12 FY13 FY14
Intime ROIC
Intime's core ROIC
Source: Company data, Nomura research
Golden Eagle (3308.HK, BUY, CP: HKD14.96
60.9 17.4
13.0
4.3 4.3
Jiangsu Anhui Shaanxi Yunnan Shanghai
Store network breakdown by region
24,554
29,896 26,585
29,039 28,879 33,233 31,997 32,728
40,131 40,048
45,136
52,145
0
10,000
20,000
30,000
40,000
50,000
60,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E
Average GFA per store (sqm)
Average size per store
28
6; TP: HKD17.60)
5.7 5.6 5.2 5.3
6.0 6.0 6.1
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
2008 2009 2010 2011 2012E 2013E 2014
Age of store protfolio on GFA (years) Age of comparable stores
Age of store portfolio
95.9 81.3
87.7 82.2 87.8 82.3 87.2
70.7 66.8 62.7 57.4 59.1 69.4
4.1 18.7
12.3 17.8 12.2 17.7 12.8
29.3 33.2 37.3 42.6 40.9 30.6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E
Self-owned properties Leased properties
GFA breakdown by self‐owned properties and leased properties
Source: Company data, Nomura research
Golden Eagle (3308.HK, BUY, CP: HKD14.96
0.8 2.6
4.8 5.9
9.3
13.9
16.9 18.5
19.5 20.0 19.5 19.0 18.5
0.0
5.0
10.0
15.0
20.0
25.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E
Unused prepaid card balance to GSP (%)
Unused pre‐paid card balance as % to GSP
-62.2
-50.7
-30.2
-15.1 -12.9
-22.7
-7.8
13.1
26.8 28.6
-70.0
-60.0
-50.0
-40.0
-30.0
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
2010 2011 2012E 2013E 2014E
Net gearing (%) Adjusted net gearing(%)
Net gearing ratio and adjusted net gearing ratio
29
6; TP: HKD17.60)
58 61 76 73
63 61 58
14 22
14 6
16 17 17
28 17
10 20 21 22 25
0
10
20
30
40
50
60
70
80
90
100
2008 2009 2010 2011 2012E 2013E 2014E
% GFA of comparable stores % GFA of 1-2 years old stores % GFA of less than 1 year old stores
GFA breakdown by store ages
(15,000)
(10,000)
(5,000)
0
5,000
10,000
Beginning balance Cash inflow Cash outflow Ending balance
Cash excluding unused balance of prepaid cardsOP cash inflow excluding prepaid cards balance Interest incomeSydicate loanRepayment of short-term loanCapexDividend payment
Cash flow analysis for 2012‐14F
Source: Bloomberg, company data, Nomura research
Golden Eagle (3308.HK, BUY, CP: HKD14.96
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
Mar
-06
Jun-
06Se
p-06
Dec
-06
Mar
-07
Jun-
07Se
p-07
Dec
-07
Mar
-08
Jun-
08Se
p-08
Dec
-08
Mar
-09
Jun-
09Se
p-09
Dec
-09
Mar
-10
Jun-
10Se
p-10
Dec
-10
Mar
-11
Jun-
11Se
p-11
Dec
-11
Mar
-12
Jun-
12
(x)
Trading PE Mean Mean + 1std
Mean + 2std Mean - 1std Mean - 2std
P/E band with standard deviation
2010Net GFA additions (sqm) 77,153
SSSG (%) 25.1
Concessionaire rate (%) 20.0Gross profit margin for direct sales (%) 22.3Comprehensive merchandise gross margin 20.2
Operating expenses to GSP ratio (%) 7.2Staff costs 2.0Rental costs 0.9Depreciation 1.1Utilities 0.8Promotion 0.6Others operating expenses 1.8
Effective tax rate (%) 26.0
Dividend payout ratio 30.2
Summary of key ass
30
6; TP: HKD17.60)
64.3%
53.5%
43.1%
31.1%25.7% 23.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
FY09 FY10 FY11 FY12F FY13F FY14F
Golden Eagle ROIC
Golden Eagle's core ROIC
2011 2012F 2013F 2014F293,785 238,469 323,000 485,000
24.9 10 14 14.5
19.6 18.8 18.8 18.820.2 17.0 17.0 17.019.6 18.7 18.6 18.6
7.4 8.0 8.1 8.32.1 2.1 2.1 2.20.9 1.1 1.3 1.31.0 1.1 1.1 1.20.8 0.9 1.0 1.10.7 0.5 0.6 0.61.9 2.2 2.0 2.0
25.5 25.5 25.5 25.5
30.2 30.0 30.0 30.0
sumptions
Source: Company data, Nomura research
Parkson (3368.HK, Neutral, CP:HKD6.49; TP
6.5
8.7 2.2
6.5
2.2 2.2
4.3
4.3
2.2 2.2 2.2
2.2
4.3 10.9 2.2
4.3 2.2
8.7
4.3
4.3
8.7
2.2 2.2 Beijing
Shanghai
Tianjin
Chongqing
Liaoning
Heilongjiang
Hebei
Shanxi
Henan
Shandong
Jiangxi
Hunan
Anhui
Store network breakdown by region1
31,212 31,277
32,849
32,157
31,049
30,595 30,742
31,275
32,645
33,461 33,691
33,437
29,000
29,500
30,000
30,500
31,000
31,500
32,000
32,500
33,000
33,500
34,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E
Average GFA per store (sqm)
Average size per store 1
31
P:HKD6.80)
6.0 6.5 6.7
6.1 6.2 6.5 6.6 6.9 7.5
8.0 8.4 8.7 8.4 8.6
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2008 2009 2010 2011 2012E 2013E 2014E
Age of store protfolio on GFA (years) Age of comparable stores on GFA (years)
Age of store portfolio
36.2 32.8 28.6 23.0 21.2 17.8 19.5 17.7 19.5 15.4 14.7 14.6 12.7
63.8 67.2 71.4 77.0 78.8 82.2 80.5 82.3 80.5 84.6 85.3 85.4 87.3
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E
Self-owned properties Leased properties
GFA breakdown by self‐owned properties and leased properties
Source: Company data, Nomura research
Parkson (3368.HK, Neutral, CP:HKD6.49; TP
0.8
2.8 3.0
4.4
5.9 6.5
6.8 6.5
6.0 5.5
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E
Unused prepaid card balance to GSP (%)
Unused pre‐paid card balance as % to GSP1
-21.8
-49.4-46.9
-54.0
-59.9
-6.6
-33.2 -31.4
-38.7
-45.8
-70
-60
-50
-40
-30
-20
-10
02010 2011 2012E 2013E 2014E
Net gearing (%) Adjusted net gearing(%)
Net gearing ratio and adjusted net gearing ratio
32
P:HKD6.80)
86 86 82 71 71 75 74
8 5 8
8 17 10 13
6 9 10 21
12 15 13
0
10
20
30
40
50
60
70
80
90
100
2008 2009 2010 2011 2012E 2013E 2014E
% GFA of comparable stores % GFA of 1-2 years old stores % GFA of less than 1 year old stores
GFA breakdown by store ages
(6,000)
(4,000)
(2,000)
0
2,000
4,000
6,000
8,000
Beginning balance Cash inflow Cash outflow Ending balance
Cash excluding unused balance of prepaid cardsCash inflow from operation excluding prepaid cards balance Net finance incomeOthersCapex
Cash flow analysis for 2012‐14F (CNY m)
Source: Bloomberg, company data, Nomura research
Parkson (3368.HK, Neutral, CP:HKD6.49; TP
0.00
10.00
20.00
30.00
40.00
50.00
60.00
Jan-
06Ap
r-06
Jul-0
6O
ct-0
6Ja
n-07
Apr-
07Ju
l-07
Oct
-07
Jan-
08Ap
r-08
Jul-0
8O
ct-0
8Ja
n-09
Apr-
09Ju
l-09
Oct
-09
Jan-
10Ap
r-10
Jul-1
0O
ct-1
0Ja
n-11
Apr-
11Ju
l-11
Oct
-11
Jan-
12Ap
r-12
Jul-1
2
(x)
Trading PE Mean Mean + 1std
Mean + 2std Mean - 1std Mean - 2std
P/E band with standard deviation
2010Net GFA additions (sqm) 111,938
SSSG (%) 11.4
Concessionaire rate (%) 19.2Gross profit margin for direct sales (%) 17.3Comprehensive merchandise gross margin (%) 19.0
Operating expenses to GSP ratio (%) 13.6Staff costs 2.7Rental costs 4.3Depreciation 1.3Others operating expenses 5.3
Effective tax rate (%) 22.9
Dividend payout ratio 45.5
Summary of key
33
P:HKD6.80)
18.2%
17.0%
15.6%
14.4%15.2%
15.8%
12.0%
13.0%
14.0%
15.0%
16.0%
17.0%
18.0%
19.0%
FY09 FY10 FY11 FY12 FY13 FY14
Parkson ROIC
Parkson's core ROIC
2011 2012F 2013F 2014F311,859 337,867 315,640 318,382
11.4 4.0 8.0 8.0
18.7 18.5 18.4 18.417.5 17.3 17.3 17.318.6 18.4 18.3 18.3
13.8 15.1 15.5 15.62.4 2.7 3.0 3.24.2 4.7 4.5 4.41.5 1.6 1.6 1.75.7 6.1 6.4 6.3
24.1 25.0 25.5 25.5
45.0 45.0 45.0 45.0
y assumptions
Source: Company data, Nomura research
NWDS (825.HK, Neutral, CP: HKD4.30; TP: H
13.2
23.7
2.62.6
13.2
2.62.6
15.8
2.65.3
5.35.32.6
2.6
Beijing
Shanghai
Tianjin
Chongqing
Liaoning
Heilongjiang
Henan
Hubei
Hunan
Jiangsu
Zhejiang
Store network breakdown by region
6.16.5
7.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
FY08 FY
Average age of total
Age of
66.6 66.1 65.653.8 57.0
75.887.2
12.2 17.8 12.815.0
28.512.9
11.121.1 16.1 21.5 31.314.5 11.3 1.7
0102030405060708090
100
FY08 FY09 FY10 FY11 FY12E FY13E FY14E
% GFA of comparable stores
% GFA of 1-2 years old stores
GFA breakdown by store ages
0.0 0.0 0.10
0.0
1.0
2.0
3.0
4.0
5.0
6.0
FY04 FY05 FY06 FY
Advance from customers
Unused pre‐paid ca
34
HKD4.10)
6.0 6.4
7.58.3 8.1
Y09 FY10 FY11
GFA-self operated stores
f store portfolio
22,292 20,341
22,822 24,674
26,647 27,335 30,277
34,013 35,476
37,003 36,720
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
average GFA per store (sqm)
Average size per store
0.5
1.4
4.5
5.3
4.5
Y07 FY08 FY09 FY10 FY11
s as % of GSP
ard balance as % to GSP
(75.4) (74.5)
(36.3)
(22.5)(29.6)
(69.6) (67.5)
(27.6)
(12.7)(19.3)
(80.0)
(70.0)
(60.0)
(50.0)
(40.0)
(30.0)
(20.0)
(10.0)
0.0 FY2010 FY2011 FY2012E FY2013E FY2014E
Net gearing (%) Adjusted net gearing (%)
Net gearing ratio and adjusted net gearing ratio
Source: Bloomberg, company data, Nomura research
NWDS (825.HK, Neutral, CP: HKD4.30; TP: H
FY10Net GFA additions(sqm) 118,400
SSSG(%) for self-operated stores 5.3
Concessionaire rate(%) 19.4Gross profit margin of direct sales(%) 25.5Comprehensive merchandise gross margin(%) 19.8
Operating expenses to GSP ratio(%) 15.8Staff costs 3.5Rental costs 5.3Depreciation 2.9Other operating expenses 3.1
Effective tax rate(%) 28.8
Dividend payout ratio(%) 43.8
Summary of key assump
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
Jul-0
7Se
p-07
Nov
-07
Jan-
08M
ar-0
8M
ay-0
8Ju
l-08
Sep-
08N
ov-0
8Ja
n-09
Mar
-09
May
-09
Jul-0
9Se
p-09
Nov
-09
Jan-
10M
ar-1
0M
ay-1
0Ju
l-10
Sep-
10N
ov-1
0Ja
n-11
Mar
-11
May
-11
Jul-1
1Se
p-11
Nov
-11
Jan-
12M
ar-1
2M
ay-1
2Ju
l-12
(x)
Trading PE MeanMean + 1std Mean + 2stdMean - 1std Mean - 2std
P/E band with standard deviation
1
1
2
2
3
35
HKD4.10)
FY11 FY12F FY13F FY14F90,100 148,385 184,927 57,090
18.2 12.0 10.0 10.0
18.8 18.4 18.0 17.617.8 17.0 17.5 17.518.8 18.3 18.0 17.6
14.8 16.3 16.3 16.03.7 3.8 3.9 3.86.4 6.4 6.2 6.02.6 2.4 2.3 2.43.7 3.7 3.6 3.4
23.1 26.0 27.0 27.0
31.5 40.0 40.0 40.0
ptions
16.6%15.2%
16.7%
12.2%10.6% 10.8%
5.0%
0.0%
5.0%
0.0%
5.0%
0.0%
FY09 FY10 FY11 FY12 FY13 FY14
NWDS ROIC
NWDS's core ROIC
Source: Bloomberg, Nomura estimates
Belle (1880.HK, BUY, CP: HKD14.18; TP: HK
0.00 5.00
10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 50.00
May
-07
Aug-
07
Nov
-07
Feb-
08
May
-08
Aug-
08
Nov
-08
Feb-
09
May
-09
Aug-
09
Nov
-09
Feb-
10
May
-10
Aug-
10
Nov
-10
Feb-
11
May
-11
Aug-
11
Nov
-11
Feb-
12
May
-12
Aug-
12
(x)
Trading PE MeanMean + 1std Mean + 2stdMean - 1std Mean - 2std
P/E band with standard deviation
OLD NEWy-y change of store number (%)Footw ear 15 15Sportsw ear 20 19
SSSG (%)Footw ear 8.0 7.0Sportsw ear 3.5 3.5
Gross profit margin (%) 57.8 57.0Footw ear 69.0 68.0Sportsw ear 37.0 36.5
Major operating expenses to sales ratio (%)Rental 21.1 20.5Staff 14.1 14.2Operating to sales ratio (%) 39.9 39.7
Operating margin (%) 17.9 17.3
Effective tax rate 24.0 23.8
Dividend payout ratio (%) 30.0 30.0
Summary of key as2012F
36
KD16.60)
16.0%
14.8%
15.6%
14.9%
14.6%14.7%
15.0%
14.5%
14.7%
14.9%
15.1%
15.3%
15.5%
15.7%
15.9%
16.1%
FY08 FY09 FY10 FY11 FY12 FY13 FY14
Belle ROIC
Belle's ROIC
W OLD NEW OLD NEW
15 15 15 1515 15 15 15
15.0 12.0 15.0 12.03.5 3.5 3.6 3.6
58.4 57.5 59.1 58.169.0 68.1 69.0 68.337.0 36.5 37.0 36.5
21.1 20.5 21.2 20.614.4 14.4 14.7 14.640.2 39.6 40.4 39.7
18.2 17.9 18.7 18.4
26.0 25.6 26.0 25.6
30.0 30.0 30.0 30.0
ssumptions2013F 2014F
Source: Bloomberg, Nomura estimates
Daphne (210.HK, BUY, CP: HKD7.87; TP: HK
(10.00)
(5.00)
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
Jan-
05M
ay-0
5S
ep-0
5Ja
n-06
May
-06
Sep
-06
Jan-
07M
ay-0
7S
ep-0
7Ja
n-08
May
-08
Sep
-08
Jan-
09M
ay-0
9S
ep-0
9Ja
n-10
May
-10
Sep
-10
Jan-
11M
ay-1
1
Sep
-11
Jan-
12M
ay-1
2(x)
Trading PE MeanMean + 1std Mean + 2stdMean - 1std Mean - 2std
P/E band with standard deviation
OLD NEWNet store additions Core brands 700 700
Other brands 100 100
Same-store-sales growth (%) Core brands 15 15
Gross profit margin (%) 60.4 60.7 Core brands 61.5 61.5 Other brands 57.5 57.5 OEM 40.3 40.3
Staff costs to sales (%) 14.4 13.9Rental costs to sales (%) 21.1 21.8Operating costs to sales (%) 46.3 46.9Operating margin (%) 14.1 13.7
Effective tax rate (%) 28.8 27.0
Dividend payout ratio (%) 30.0 30.0
Summary of key assum2012F
37
KD11.50)
16.1%
11.0%
13.6%
14.8%
14.1%13.6% 13.6%
10.0%
11.0%
12.0%
13.0%
14.0%
15.0%
16.0%
17.0%
FY08 FY09 FY10 FY11 FY12 FY13 FY14
Daphne ROIC
Daphne's ROIC
W OLD NEW OLD NEW
700 700 700 700
100 100 100 100
13 13 13 13
61.6 61.7 61.7 61.962.5 62.4 62.5 62.559.0 58.5 59.0 58.540.3 40.3 40.3 40.3
15.3 14.4 15.5 14.821.5 22.0 21.8 22.247.0 47.5 46.9 47.814.6 14.2 14.8 14.1
28.8 27.0 28.8 27.0
30.0 30.0 30.0 30.0
mptions2013F 2014F
Source: Bloomberg, Nomura estimates
Trinity (891.HK, BUY, CP: HKD5.35; TP: HKD
5.00
10.00
15.00
20.00
25.00
30.00
35.00
Nov
-09
Jan-
10
Mar
-10
May
-10
Jul-1
0
Sep-
10
Nov
-10
Jan-
11
Mar
-11
May
-11
Jul-1
1
Sep-
11
Nov
-11
Jan-
12
Mar
-12
May
-12
Jul-1
2(x)
Trading PE MeanMean + 1std Mean + 2stdMean - 1std Mean - 2std
P/E band with standard deviation
OLD NEWNet store additionMainland China 40.0 30.0
Same-store-sales grow th (%)Mainland China 12.0 6.0HK 12.0 12.0Taiw an 12.0 (10.0)
Gross profit margin (%) 80.4 78.5Retail: Mainland China 80.5 79.5Retail: Hong Kong & Macau 80.5 80.2Retail: Taiw an 75.0 74.5Retail: Others 58.5 58.5Others 32.6 27.5License business 100.0 100.0
Operating costs to sales ratio (%) 59.1 60.1Rental costs 21.5 22.0Staff costs 21.6 22.8A&P expenses 5.0 5.0
Operating margin (%) 21.3 18.4
Effective tax rate (%) 24.0 20.2
Dividend payout ratio (%) 70.0 70.0
2012F
38
D6.40)
8.1%7.7%
9.6%
11.8%12.7% 13.0%
13.8%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
13.0%
14.0%
15.0%
FY08 FY09 FY10 FY11 FY12 FY13 FY14
Trinity ROIC
Trinity's ROIC
OLD NEW OLD NEW
40.0 40.0 40.0 40.0
15.0 15.0 15.0 15.015.0 15.0 15.0 15.012.0 5.0 12.0 5.0
80.8 78.9 80.8 79.481.0 80.0 81.0 80.081.0 80.5 81.0 80.575.0 74.5 75.0 74.558.5 60.0 58.5 65.032.6 27.5 32.6 27.5100.0 100.0 100.0 100.0
58.0 59.8 57.0 58.321.5 22.0 21.5 22.020.6 22.5 20.1 21.95.0 5.0 5.0 5.0
22.8 19.1 23.8 21.1
24.0 20.2 24.0 20.2
70.0 70.0 70.0 70.0
2013F 2014F
Source: Bloomberg, Nomura estimates
China Lilang (1234.HK, REDUCE, CP: HKD4
5.00 7.00 9.00
11.00 13.00 15.00 17.00 19.00 21.00 23.00 25.00
Sep
-09
Nov
-09
Jan-
10M
ar-1
0M
ay-1
0Ju
l-10
Sep
-10
Nov
-10
Jan-
11M
ar-1
1M
ay-1
1Ju
l-11
Sep
-11
Nov
-11
Jan-
12M
ar-1
2M
ay-1
2Ju
l-12
(x)
Trading PE Mean Mean + 1stdMean + 2std Mean - 1std Mean - 2std
P/E band with standard deviation
OLD NEWNet store additions LILANZ 200 200 L2 80 80
SSSG 10 10
Average sales prices (Rmb) 233 233
Sales Volume (m pieces) 13.6 13.6
Gross profit margin (%) 40.4 40.4
Major operating expenses to sales ratio (%)Staff 4.6 4.6A&P 8.0 8.0
Operating margin 27.4 27.4
Effective tax rate 25.5 25.5
Dividend payout ratio 65.0 65.0
Summary of assump2012F
39
4.30; TP: HKD4.10)
43.4%
65.2%
94.7%
83.6%
67.4%
50.6% 52.2%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
FY08 FY09 FY10 FY11 FY12F FY13F FY14F
China Lilang ROIC
OLD NEW OLD NEW
200 200 200 200100 100 100 100
12 8 12 8
245 240 257 252
15.2 12.0 17.3 13.8
41.0 40.4 41.0 40.4
4.5 5.9 4.4 5.78.3 8.3 8.5 8.5
27.7 25.2 27.6 25.2
28.5 28.5 28.5 28.5
65.0 65.0 65.0 65.0
ption changes2013F 2014F
Source: Bloomberg, Nomura estimates
I.T (999.HK, BUY, CP: HKD3.21; TP: HKD6.3
(20.00)
(10.00)
0.00
10.00
20.00
30.00
40.00
50.00
60.00
Mar
-05
Jul-0
5
Nov
-05
Mar
-06
Jul-0
6
Nov
-06
Mar
-07
Jul-0
7
Nov
-07
Mar
-08
Jul-0
8
Nov
-08
Mar
-09
Jul-0
9
Nov
-09
Mar
-10
Jul-1
0
Nov
-10
Mar
-11
Jul-1
1
Nov
-11
Mar
-12
Jul-1
2
(x)
Trading PE MeanMean + 1std Mean + 2stdMean - 1std Mean - 2std
P/E band with standard deviation
6
7
8
9
10
11
12
13
14
15
OLDy-y growth of sales footage (%)China - retail stores 20.0China - franchised stores 10.0Hong Kong 5.0Japan 10.0Other - retail stores 5.0Other - franchised stores 5.0
Same-store-sales growth (%)Hong Kong 8Mainland China 8
Gross profit margin (%) 62.0Hong Kong 61.9Mainland China 63.2
Rental to sales ratio (%) 21.1Staff costs to sales ratio (%) 16.5
Effective tax rate 20.0
Dividend payout ratio 40.0
Summary of key a
40
0)
13.9%
7.5%
13.3%
14.4% 14.3%
13.4% 13.4%
6.0%
7.0%
8.0%
9.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
FY08 FY09 FY10 FY11 FY12 FY13 FY14
I.T ROIC
I.T's ROIC
FY15FNEW OLD NEW
10.0 20.0 20.0 20.010.0 10.0 10.0 10.05.0 5.0 5.0 5.0
10.0 10.0 10.0 10.010.0 5.0 10.0 10.00.0 5.0 0.0 0.0
10 10 10 105 12 8 8
61.0 62.2 61.7 62.061.6 61.9 61.9 61.960.7 63.6 62.1 62.7
21.1 20.9 21.3 21.515.8 16.7 15.9 16.2
18.0 20.0 18.5 19.0
40.0 40.0 40.0 40.0
FY13F FY14Fassumptions
Source: : Bloomberg, Nomura estimates
Ports Design (589.HK, Neutral, CP: HKD6.15
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
Oct
-03
Feb-
04Ju
n-04
Oct
-04
Feb-
05Ju
n-05
Oct
-05
Feb-
06Ju
n-06
Oct
-06
Feb-
07Ju
n-07
Oct
-07
Feb-
08Ju
n-08
Oct
-08
Feb-
09Ju
n-09
Oct
-09
Feb-
10Ju
n-10
Oct
-10
Feb-
11Ju
n-11
Oct
-11
Feb-
12Ju
n-12
(x)
Trading PE Mean Mean + 1std
Mean + 2std Mean - 1std Mean - 2std
P/E band with standard deviation
OLD NEW OLDNet store additions 25 25 26
Same-store sales growth (%) 7 4 10
Stock provision as % to sales 6.4 7.6 6.3
Gross profit margin (%) 82.0 82.5 82.0Retail 85.7 86.3 85.3OEM 11.5 11.5 11.5Others 26.1 55.0 26.1
Operating expenses to sales ra 50.4 50.6 51.1Rental 21.4 20.9 21.5Staff 16.0 15.7 16.7Advertising 3.6 3.5 3.8Other operating expenses 9.4 10.4 9.1
Operating margin (%) 25.2 24.3 24.5
Effective tax rate (%) 26.9 26.9 26.9
Dividend payout ratio 80.0 75.0 65.0
Summary of key assump2012F
41
5; TP: HKD6.90)
23.1%22.6%
20.7%
16.6%15.8% 16.0% 15.9%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
FY08 FY09 FY10 FY11 FY12 FY13 FY14
Ports Design ROIC
Ports Design's ROIC
NEW OLD NEW26 29 29
9 10 9
7.7 6.1 7.6
82.4 81.9 82.485.9 84.9 85.711.5 11.5 11.555.0 26.1 55.0
51.2 51.6 51.821.0 21.6 21.116.1 17.3 16.73.7 3.8 3.810.3 8.8 10.2
23.6 24.2 23.0
26.9 26.9 26.9
65.0 65.0 65.0
ptions2013F 2014F
Appendix A-1
Any Authors named on this report are Research Analysts unless otherwAnalyst CertificationI, Sarah Xing, hereby certify (1) that the views expressed in this Research report accurately reflect my pepart of my compensation was, is or will be directly or indirectly related to the specific recommendations oinvestment banking transactions performed by Nomura Securities International, Inc., Nomura InternationaImportant DisclosuresOnline availability of research and conflict-of-interest disclosuresNomura research is available on www.nomuranow.com/research, Bloomberg, Capital IQ, Factset, MarkitHImportant disclosures may be read at http://go.nomuranow.com/research/globalresearchportal/pages/discyou have any difficulties with the website, please email [email protected] for help.
The analysts responsible for preparing this report have received compensation based upon various factoUnless otherwise noted, the non-US analysts listed at the front of this report are not registered/qualified asubject to FINRA Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies
Any authors named in this report are research analysts unless otherwise indicated. Industry Specialists idresponsible for the sales and trading effort in the sector for which they have coverage. Industry SpecialistMarketing Analysts identified in some Nomura research reports are research analysts employed by Nomusector for which they have coverage. Marketing Analysts may also contribute to research reports in which
Distribution of ratings (Global)The distribution of all ratings published by Nomura Global Equity Research is as follows:46% have been assigned a Buy rating which, for purposes of mandatory disclosures, are classified as a 43% have been assigned a Neutral rating which, for purposes of mandatory disclosures, is classified as a11% have been assigned a Reduce rating which, for purposes of mandatory disclosures, are classified aAs at 30 June 2012. *The Nomura Group as defined in the Disclaimer section at the end of this report.
Explanation of Nomura's equity research rating system in Europe, Middle East and AfriThe rating system is a relative system indicating expected performance against a specific benchmark idevalue - current price)/current price, subject to limited management discretion. In most cases, the fair valuevaluation methodology such as discounted cash flow or multiple analysis, etc.STOCKSA rating of 'Buy', indicates that the analyst expects the stock to outperform the Benchmark over the next Benchmark over the next 12 months. A rating of 'Reduce', indicates that the analyst expects the stock totarget price and estimates have been suspended temporarily to comply with applicable regulations and/ocapacity in a merger or strategic transaction involving the company.Benchmarks are as follows: United States/Europe: please see valuation methodologies for explanationshttp://go.nomuranow.com/research/globalresearchportal/pages/disclosures/disclosures.aspx; Global Emmethodology.SECTORSA 'Bullish' stance, indicates that the analyst expects the sector to outperform the Benchmark during the Benchmark during the next 12 months. A 'Bearish' stance, indicates that the analyst expects the sector tBenchmarks are as follows: United States: S&P 500; Europe: Dow Jones STOXX 600; Global Emergin
42
wise indicated
ersonal views about any or all of the subject securities or issuers referred to in this Research report, (2) no r views expressed in this Research report and (3) no part of my compensation is tied to any specific al plc or any other Nomura Group company.
Hub, Reuters and ThomsonOne.closures/disclosures.aspx or requested from Nomura Securities International, Inc., on 1-877-865-5752. If
ors including the firm's total revenues, a portion of which is generated by Investment Banking activities. as research analysts under FINRA/NYSE rules, may not be associated persons of NSI, and may not be s, public appearances, and trading securities held by a research analyst account.
dentified in some Nomura International plc research reports are employees within the Firm who are ts do not contribute in any manner to the content of research reports in which their names appear. ura International plc who are primarily responsible for marketing Nomura’s Equity Research product in the h their names appear and publish research on their sector.
Buy rating; 40% of companies with this rating are investment banking clients of the Nomura Group*.a Hold rating; 46% of companies with this rating are investment banking clients of the Nomura Group*. s a Sell rating; 21% of companies with this rating are investment banking clients of the Nomura Group*.
ca, US and Latin Americaentified for each individual stock. Analysts may also indicate absolute upside to target price defined as (fair e will equal the analyst's assessment of the current intrinsic fair value of the stock using an appropriate
12 months. A rating of 'Neutral', indicates that the analyst expects the stock to perform in line with the o underperform the Benchmark over the next 12 months. A rating of 'Suspended', indicates that the rating, or firm policies in certain circumstances including, but not limited to, when Nomura is acting in an advisory
s of relevant benchmarks for stocks, which can be accessed at: merging Markets (ex-Asia): MSCI Emerging Markets ex-Asia, unless otherwise stated in the valuation
next 12 months. A 'Neutral' stance, indicates that the analyst expects the sector to perform in line with the to underperform the Benchmark during the next 12 months.ng Markets (ex-Asia): MSCI Emerging Markets ex-Asia.
Explanation of Nomura's equity research rating system in Japan and Asia ex-JapanSTOCKSStock recommendations are based on absolute valuation upside (downside), which is defined as (TargeTarget Price will equal the analyst's 12-month intrinsic valuation of the stock, based on an appropriate vA 'Buy' recommendation indicates that potential upside is 15% or more. A 'Neutral' recommendation inrecommendation indicates that potential downside is 5% or more. A rating of 'Suspended' indicates thaand/or firm policies in certain circumstances including when Nomura is acting in an advisory capacity inSecurities and/or companies that are labelled as 'Not rated' or shown as 'No rating' are not in regular rcontinuing or additional information from Nomura relating to such securities and/or companies.SECTORSA 'Bullish' rating means most stocks in the sector have (or the weighted average recommendation of thstocks in the sector have (or the weighted average recommendation of the stocks under coverage is) a weighted average recommendation of the stocks under coverage is) a negative absolute recommendat
Target PriceA Target Price, if discussed, reflect in part the analyst's estimates for the company's earnings. The achiother risks related to the company or the market, and may not occur if the company's earnings differ fro
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et Price - Current Price) / Current Price, subject to limited management discretion. In most cases, the valuation methodology such as discounted cash flow, multiple analysis, etc.ndicates that potential upside is less than 15% or downside is less than 5%. A 'Reduce'at the rating and target price have been suspended temporarily to comply with applicable regulations n a merger or strategic transaction involving the subject company.research coverage of the Nomura entity identified in the top banner. Investors should not expect
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