[ET Net News Agency, 28 April 2015] Moody's Investors Service said that Parkson Retail
Group Limited's (03368) profit warning for its 2015 first quarter results is credit
negative. However the announcement will not immediately impact its Ba3 corporate family
rating, senior unsecured bond ratings, or its stable ratings outlook.
On 24 April, Parkson announced that it expected to record a loss for its 2015 first
"The deterioration in operating performance will further pressure Parkson's current
rating. Apart from the RMB140 million penalty from its property dispute in Beijing, we are
also concerned about the company's exposure to industry-wide weak consumer sentiment and
ongoing margin pressure," said Lina Choi, a Moody's Vice President and Senior Analyst.
"Nonetheless, we consider the penalty as a one-time event which is absorbable by its
substantial cash on hand," Choi added.
The RMB140 million penalty is relatively small given Parkson's cash on hand and cash
equivalent which totaled RMB4.9 billion at end-2014.
Moody's will continue to monitor the operating and financial performances of the company
over the next two quarters. If its performance deteriorates beyond Moody's expectation,
then its ratings could be under pressure for downgrade. (KL)
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