Robinson Department Store Shares Could Head Higher As Thai Consumers Are Feeling Good

Witawat (Ed) Wijaranakula, Ph.D.
Thu Feb 23, 2017

Robinson Department Store PCL (SET:ROBINS), 27.75% stake owned by Central Retail Corporation and 26.08% stake owned by CRG Service Co., Ltd, as of March 09, 2016, and its subsidiaries operate department stores across Thailand under the name “Robinson”. The company currently has 42 stores, comprised of 11 stores in Greater Bangkok and 31 stores in the upcountry. In addition, Robinson currently has 2 stores in Vietnam. Central Retail Corporation and Central Restaurants Group (CRG) Co., Ltd. are part of the Central Group of Companies or Central Holding, a privately-owned conglomerate holding company, based in Thailand.

The Robinson Department Store offers lines of products, such as soft line products and hard line products. Soft line products include ladies’ wear, men’s wear, cosmetics, accessories and children’s wear. Hard line products include home decoration and household apparatus, gifts and toys. According to Financial Times, the company has also developed its own product designs which can be divided into its private brand and exclusive brands, which are international brands that are imported and exclusively available at Robinson.

The company said on February 16, 2017 that its second half 2016 revenues were 13.59 billion baht, missing the 16.06 billion baht estimate of an analyst, according to Thomson Reuters. Robinson posted second half 2016 earnings of 1.36 baht per share, missing the 1.39 baht per share estimate of an analyst. For the full year 2016, Robinson Department Store’s earnings per share was 2.53 baht, beating the 2.31 baht consensus estimate of 19 analysts. The company said same-store sales in Q4 2016 grew at a modest rate of +0.1% due to heavy rainfall, flood, the explosion in the south and an economic slowdown that impacted sales and overall consumer sentiment.

For the full year, revenues came in at 26.08 billion baht, up 3.54% year-over-year, compared to the consensus estimate of 28.07 billion baht. The 17 analysts covering the company expect dividends of 1.25 baht per share for the upcoming fiscal year, representing a year-over-year increase of 25.0%. 

In their press release, Robinson said it plans to open 3 new stores in Thailand (1 lifestyle center in Petchaburi in the first half, 1 lifestyle in Kampeangphet and 1 department store in Mahachai in the second half). By the end of 2017, the company will have a total of 47 stores in Thailand and 2 stores in Vietnam.

The University of the Thai Chamber of Commerce said in early February that its consumer confidence index rose to 74.5 in January, an 11-month high, citing government stimulus measures, improved exports and higher commodity prices as the reasons, according to a Reuters report. 

From our technical viewpoint, ROBINS shares broke out the descending channel in June 2016 but were rejected at the 68 baht level several times. The stock is now bouncing along the upper trendline support of the descending channel and may try to head back higher to retest the 65 and 68 baht levels. 

According to the Financial Times, the consensus amongst 22 polled investment analysts covering Robinson Department Store gave the company an Outperform rating, with the median 12-month price target of 65 baht a share, as of February 20.

Disclosure: No position and no recommendation for any companies mentioned.


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