BDA-老虎基金百盛百貨深度研究報(bào)告EN-2012 12 24

ProjectParkson(3368.HK):DecreasingSSSGSince2011;HigherRiskExposureToTheOversupply/PopularityofShoppingMallsThanToE-Commerce;MostVulnerabletotheEmergenceofShoppingMallsAmongPeers;AWeakeningCompetitivenessInTheLongTerm24December,2012ForTigerGlobalOnly?BDA20122TableofContentsExecutiveSummaryASnapshotofParksonHypothesis1:DepartmentStoresareaCommodityHypothesis2:VulnerabilitytoOnlineShoppingHypothesis3:VulnerabilitytoShoppingMallsHypothesis4:WeakeningCompetitivenessHypothesis5:SustainabilityofMarginsAppendixExecutiveSummary(1/3)H1:Usingtheconcessionairemodel,departmentstoresarecommoditiesinChinaDepartmentstoresarecommoditiesinChinaandParksononlystandsoutinthesaleofprestigecosmeticsinsometier2and3cities.Merchandisingisnotadifferentiatorformid-enddepartmentstores(DS)inChinaandtheydon’thaveastrongbrandingimpactonChineseconsumersParksoniswidelyperceivedtohavethesamecapabilityofmerchandisingpopularbrandsaslocalrivals,butitdoesstandoutbysellingprestigecosmeticsinafewtier2andmosttier3cities.H2:ParksonisvulnerabletoboomingonlineshoppingduetoitsmerchandisemixMostdepartmentstores,includingParkson,don’tsenseasolidthreatfromonlinesales.However,theboominonlineshoppingdoeshaveaslightimpactintier1citiesTraditionalDScustomerstreattheonlinechannelasawayofpurchasing“cheap”,“innerwear”or“no-brand”apparelitemsand“gadget”and“non-facialtreatment”cosmeticsastheyareprimarilyconcernedabout“fitting”and“productauthenticity”.Theyhaveanegativeattitudetowardsonlineshoppinginthesetwoaspectsandmostofthemhaveseenonlyaminimalimprovementtothenegativeaspectsofonlineshoppinginrecentyears.Mostbest-sellingbrandsinDStreatonlinechannelsasamarketingtool(masstigeandprestigecosmetics)orinventoryclearance(apparel),generatingverysmallrevenuesharefrome-commerce.Theydon’tsenseastrongthreatfromonlinefleeingorsmuggledgoods.However,salesofno-brandwomen’sclothingitemsatDShavebeenheavilyimpactedbyTaobaobrands.Theboominonlineshoppinghasn’tyethadasubstantialimpactonParksonbecause:1)online-drivencategories/subcategoriesnowaccountforasmallshareofGMVinDSlikeParkson;2)well-operatedDShaveaquickturnaroundcapabilitywhichreducestheimpactofonlineshopping;3)onlineshoppingstillhasalowpenetrationintier2and3citieswhereParksonhasastrongpresence.HypothesesKeyTakeawaysSource:BDAanalysisExecutiveSummary(2/3)4H3:ParksonwillsufferadilutedcustomertrafficgiventhecurrentpopularityandoversupplyofshoppingmallsCompetitionfromshoppingmalls(SM)posesagreaterthreattodepartmentstores(DS)thandoese-commerce.TheoverbuildingandpopularityofshoppingmallswilldilutetrafficatDS,especiallyintier1cities.ParksonandNWDSseemmorevulnerablethanpeerstothechangingbehaviorofbothconsumersandsuppliersTheoversupplyofofflineshoppingcenters(DS+SM)isawidespreadphenomenon.1)Aglobalbenchmarkingstudy(sellingspacepercapita,vacancyrate,etc.)foundthat11Chinesecitiesarealreadyoversupplied(suchasBeijingandShanghai)orarelikelytobeoversuppliedwithinthenexttwoyears(suchasShenyangandHefei).2)Somebrandsuppliersinthecosmetics,women’sclothingandcasualwearcategoriescanattributetheirslowingSSSGin2012toanincreasingdensityoflocalDS/SMwithsimilarmerchandisepositioning,whichhavecausedfiercercompetitioninlocalmarketsanddilutedtrafficforeachplayer.3)ConsumerresearchalsoconfirmedthatpeoplewhopreviouslyhadafavoritestorehavedivertedtonewDS/SMestablishedneartheirhomesorworkplaces;thistrendisespeciallyapparentintier1cities.ForDS,competitionisgreaterfromSMthane-commerce,giventhechangingbehaviorofbothcustomersandsuppliers.1)Best-sellingapparelbrandstendtoexpandtheirnetworksinSMtoachievealowerrentalpercentage,atightercontrolovercashflowandabetterbrandimage.2)ConsumerresearchfoundestablishedSMhaveamajorimpactonDSintier1cities,butnotsosevereinlowertiercitiesduetoaweakermerchandisingcapability.FastfashionbrandshaveasubstantialpresenceinSMintier1cities,furtherattractingcustomerstomovefromDStoSM.3)TherapiddevelopmentofsubwayswillhelpmakelocationsmoreconvenientandfacilitatethechangefromshoppingatDSincorecommercialzonestoentertainmentplusshoppinginSMinsubordinatecommercialzones.ToquantifySM’simpactonDS,webenchmarkedkeyplayersandfoundParkson/NWDSaremorevulnerabletotheoversupply/popularityofSMthanpeers.HypothesesKeyTakeawaysSource:BDAanalysisExecutiveSummary(3/3)55H4:Parkson’scurrentbusinessstrategywillleadtoaweakeningcompetitivenessinthelong-termParkson’scurrentbusinessstrategywillleadtoweakeningcompetitivenessinthelongtermParkson’sstoreportfoliofeaturesamid-endpositioning,smallsellingspaceandthe“anchorstoreinmalls”model,unfavorablelocations,alackofdominanceinregionalmarketsandahighpercentageofleasedproperties.Allthiswillleadtoweakeningcompetitivenessinthelong-term.Parksondoesn’thavesevererentalpressuresinthecomingthreeyears(i.e.before2016)butitdoesfaceasubstantialriskofcontractsnotbeingrenewedwhentheyexpire.Parksonhassufferedanoutflowoftalents(especiallystoremanagers)inrecentyearsduetoitslowcompensationlevels.PrepaidcardsarenotaconcernforParksonas:1)prepaidcardsarenotadecidingfactorwhenpeoplechooseaDS;Parksonisnotsubjecttoahigherprepaidcardriskthanpeers.Source:BDAanalysisH5:Although

Parksonoperatesefficiently,itsSSSGwillslowdown,implyingahighriskofoperatingmargindroppingParksonfacesgreatdownwardpressureonitsoperatingmarginintier1citieswherelaborcostshaveincreasedrapidlyinrecentyears;intier2and3cities,Parksonimproveditsmarginsin2012,especiallyinnewstoresAtcompanylevel,Parksonlagsbehindpeersintheaspectofprofitabilityduetoitspoorersalesefficiencyandhigherrentalcost.DelvingdeeperintoParkson’ssinglestoreeconomics,fixedcostsaccountforahigherpercentageofGMVthandovariablecostsinalltiersofcity.Parkson’soperatingmarginhasdeclinedslightlyintier-1citieslikeShanghaiduerisesinoperatingcosts,mainlyhigherlaborcostsandrentalcosts.However,intier2and3cities,Parksonhasseenimprovedmarginsinmostofitsnewstores.HypothesesKeyTakeaways6TableofContentsExecutiveSummaryASnapshotofParksonHypothesis1:DepartmentStoresareaCommodityHypothesis2:VulnerabilitytoOnlineShoppingHypothesis3:VulnerabilitytoShoppingMallsHypothesis4:WeakeningCompetitivenessHypothesis5:SustainabilityofMarginsAppendixParksonisa“pure”departmentstoreformatplayeremployingtheconcessionairemodelinChina…7BusinessModelDescriptionAs%of2011GMVConcessionairemodelBuyoutmodelRentalmodelMerchandiseCategories~86%~9%~1%LuxurygoodsPrestigecosmeticsMostmerchandisecategories,suchasapparel,shoes,sportsgoodsDepartmentstoreschargebrandvendorsanddistributorscommissionsbasedonsalesrevenuesTheconcessionratenormallyrangesbetween20-30%11~1.5monthspaymentterms

Source:Companyinformation,BDAinterviewsandanalysisDepartmentstorestakeinventoriesfrombrandsuppliersandsellthemdirectlytocustomers.CashondeliverywithvendorsDepartmentstoresleasefloorareasdirectlytobrands,andonlychargerentalsFixedrentalfeesandleasecontractsnormallylastingfor3-5yearsParkson’sBusinessModelParksondoesnotemploytheshoppingmallformat,andactsasapure“departmentstoreformat”player.AswithmostdepartmentstoresinChina,Parksonmainlyusestheconcessionairemodelandnotthebuyout/fixedrentalmodelNote:1.Thisisthegrossconcessionratedefinedinthecontracts.…andpositionsitselfasamid-endtrendystore,targetingyoungpeopleagedaround25-30years8TargetGroupTopMerchandiseCategoriesTypicalStoresAs%ofTotalGMVMid-endtrendyYoungpeople20-35yearsold~83%Women’swear(young)Men’swearCosmeticsShoesKunmingBolianFlagship(No.2)ShanghaiNineSea(No.3)NanchangZhongshan(No.7)High-end30+yearsold~17%JewelryWomen’swear(mature)LuxurygoodsMen’swearCosmeticsBeijingFlagshipStore(No.1)BeijingSuntransStoreExpertsgenerallybelievethatParksonhasastrongmerchandisingcapabilityincosmeticsandwomen’swear(young)…Position

Source: Companyinformation,BDAinterviewsandanalysisMoststores,96%ofnetwork4%ofnetwork“Ofalldepartmentstores,Parksonhasthebestmerchandisingcapabilityincosmeticsandwomen’swear(young),manyinternationalbrandscanbefoundinParkson.”Mr.Xu,OperatingManagerforaCompetitorinWuxi“Parksonhasthemostcompleterangeofhigh-endcosmeticsbrandsinNanchang,whichhelpsitsecurealargeproportionofcustomertraffic.-Mr.Xu,ManagerforaCompetitorinNanchang“Parksonisgoodatselectingpopularapparelbrands…youngwomen’swearusuallyhasahigherASPandispopularwithinitstargetgroup–youngpeopleaged20-35yearsold.”-Mr.Xu,MarketingManagerforaCompetitorinXi’an…toattractyoungpeopleof20-35yearsold“Parksondoesagoodjobinwomen’swear,itsmerchandisingcapabilitysupportsitsmid-endtrendypositionandmostcustomersthereareveryyoungpeople.They’relookingforvaluablefashiongoods”-Mr.Zong,OperatingManagerforaCompetitorinZhengzhouMostofParkson’sstoresarepositionedasmid-endtrendySince1994ithasbecomealeadingnationalplayerbyopening52storesin34Chinesecities…91994OpeneditsfirstdepartmentstoreinBeijing2004Operatedmorethan30storesinChinaListedas“ParksonRetailGroupLimited”onthemainboardoftheHongKongStockExchange20052012LaunchedtheParksonChinae-commercewebsite2009Continuouslyexpanded,operatingmorethan40storesintotal2011Operatedabout52stores(45directly-run,oneJVandsixmanagedstores),covering34citiesand23provincesOperatednearly20storesinChina2000DirectlyownedandJVManagedParkson’sStoreNetwork(asatendof2011)CompanyMilestones

Source: Companyinformation,BDAinterviewsandanalysisParksongenerates~60%ofGMVfromitstoptenstoresbutitdoesn’thavecoregeographicmarkets10Parkson’sbest-performingstoreshavecontributedsolidGMVandprofits……butitdoesn’thavecoregeographicmarketsasnosingleprovincehascontributedover20%ofGMVNanningStoreNanchangStoreHefeiStoreWuxiStoreXi’anShidaiStoreBeijingFlagshipStoreKunmingBolianStoreShanghaiNineSeaStoreAnshanStoreUrumqiStore(JCE)14%WuxiXi’anShanghaiBeijingKunmingUrumqiAnshanNanningHefeiNanchangParkson’sTop10StoresbyGMVShare(2011)Parkson’sTop10CitiesbyGMVShare(2011)GrossMargin1(2011)21%20%21%18%18%18%19%18%17%18%Source:BDAresearchandanalysisUnlikeParkson,GoldenEagleandIntimeeachrelyoncoregeographicmarkets(JiangsuandZhejiangProvincesrespectively)togeneratethebulkofrevenue,i.e.60%oftheirrevenuesaregeneratedbyasingleprovinceNote:1.Grossmarginreferstonetconcessionrate,whichisequivalenttothegrossconcessionrate(definedincontracts)deductingpromotionfeesGMVShareGMVShareThegrossmargin(netconcessionrate)ofParkson’stop10storesgenerallyranges18-21%,higherthanthatoftheotherstoresFollowingtherapidexpansionofthenetwork,itsGMVandnetrevenuegrewrapidlyintheyears2007-2011…11201116,42686%9%1%0%3%201014,10685%9%1%0%4%200912,36785%10%1%0%4%200810,69184%11%1%0%4%20079,00383%12%2%0%4%GMV1NetRevenue2Note:1.GMVreferstogrossmerchandisingvalue,whichisalsonamedasGSP(grosssalesproceeds)inParkson’sAR.2.NetrevenueactuallyincludesalltheitemsinGMVexceptforconcessionairesales(whichareregardedasanitemofgrosssalesproceeds)butcommissionsfromconcessionairesales(whichareregardedasanitemofnetrevenue).3.Otheroperatingrevenuesincludepromotionincome,creditcardhandlingfees,equipmentleasingincome,displayspaceleasingfees,administrationfees,servicefees,governmentgrants,compensationincome,gainondisposalofajointly-controlledentity,andothers.TotalGMV16%Otheroperatingrevenues315%Consultancyandmanagementservicefees-13%GrossRentalincome11%Directsales10%Concessionairesales17%CAGR(2007-2011)Parkson’sGMVandNetRevenue(2007-2011)3,0603,5373,9094,4004,938Unit:RMBMNNetrevenue13%

Source: CompanyinfoandBDAanalysis…h(huán)owever,excludingthecontributionfromPOSgrowth,Parkson’sSSSgrowthhasdeclinedsharplysince2011,fallingto-2%inQ32012…12CPISSSGQ1125%2%7%6%12%6%13%Q1115%4%3%3%14%5%12%3%11%3%Q311Q411Q212Q208Q308Q40815%Q10814%2%12%Q1102%11%1%9%Q209Q309Q409Q210Q310Q410Q2115%-1%-2%Q109-1%9%-3%7%-2%14%-1%8%2%-2%Q312Parkson’sSSSGrowth(Q12008–Q32012)Post-CPISSSGQ2121%Q112-2%Q4112%Q3115%Q2116%Q111Q3107%Q2109%Q1108%Q4098%8%Q4107%Q3099%Q2097%Q10910%Q40811%Q30817%Q20815%Q10813%Q312-4%Parkson’sPost-CPISSSGrowth:(Q12008–Q32012)

Source: NBS,Companyinformation,BDAanalysis…inthemeantime,theoverallconcessionrateandoperatingmargincontinuetodecline,implyingthatsame-storeprofitabilityhasn’timprovedinrecenttimes13200720082009201020111H2012NetMarginOperatingMargin23.3%30.6%23.2%33.4%24.0%34.0%24.8%34.2%23.8%33.2%20.6%25.6%20072008200920102011NetConcessionRate18.7%19.2%19.3%19.9%20.3%1H201218.2%Parkson’sConcessionRate(2007-1H2012)Parkson’sOperationMarginandNetMargin(2007-1H2012)ParksonclaimedthatthedecliningoperatingmarginwastheresultofincreasedOPEXforitsambitiousstoreopeningprogramandtheremodelingofflagshipstoresAfteropeningtwostoresin1H2012,thecompanyplanstoopenfivetosixstoresin2HandeighttoninestoresinFY13Parkson’sShanghaiandBeijingflagshipstoresareundergoingremodelingintwophases,bothofwhichareexpectedtobecompletedbeforetheendofQ32013.Sincetheoperatingmarginandnetmarginhavedeclinedsharplyrecently,same-storeprofitabilitygrowthcouldbeminimalorevennegativeforsomestores.Ahighercontributionfromnewstoreswithlowerconcessionrateshasledtoadecliningconcessionrate.Parksonopenedninestoresin1H2011.Collectively,theseninenewstoresrecordedamerchandisegrossmarginof16.3%,whichdraggeddowntheaverageconcessionrate.LowersalesproportionfromstoreswithhigherconcessionratesInparticular,theShanghaiandBeijingflagshipstoreswithhighconcessionratescontributedasmallerproportionofsales,whichfurtherreducedtheconcessionrate.RelativelyhighergrowthofcategoriescarryinglowermarginsCategorieswithlowerconcessionrates,e.g.goldandjewelrypostedrelativelyhighgrowth,whichisanotherreasonwhytheaverageconcessionratedecreased.

Source: Companyinformation,BDAresearchandanalysisAchannelcheckconfirmedtherecentpoorperformanceinmostofitstoptenstores,andevennegativeSSSGinitstwoflagshipstoresinBeijingandShanghai…14BeijingFlagshipStoreHigh-endprestigiousNo.2/3221421%-(10-15)%-7%ShanghaiNineSeaStoreMid-endtrendyNo.794021%-(10-15)%-11%KunmingFlagshipStoreMid-endtrendyNo.1119720%5-7%6%UrumqiStore(JCE)Mid-endtrendyNo.2/382118%10-15%9%NanningStoreMid-endtrendyNo.476918%-5%-4%NanchangStoreMid-endtrendyNo.372619%10-12%10%HefeiStoreMid-endtrendyNo.268418%5-10%7%WuxiStoreMid-endtrendyNo.359817%-10%0%Xi'anShidaiStoreMid-endtrendyNo.5/658118%8-10%8%

AnshanStoreMid-endtrendyNo.184618%5-10%-2%

Source:Companyinformation,BDAinterviewsandanalysisTop10ParksonStoresTier-1CityTier-2CityTier-3CityStoreBrandPositionCompetitivePositioninLocalMarket2011GMV

(RMB)2011GM

(%)2012YoYGrowthofLocalMarketParkson’s2012YoYGrowth…andmostexpertsbelievethattheweakSSSGcanbemostlyattributedtotheemergenceofshoppingmallsratherthantheboominonlineshopping15

Source: Companyinformation,BDAinterviewsandanalysisBeijingFlagshipStoreShanghaiNineSeaStoreWomen’sbagsNon-brandedwomen’swearMen’swearWomen’sshoesandbeddingsLuxurygoodsWatchJewelryCategorieswithdecliningsalesNanningstoreAnshanStoreWomen’swear(young)Women’sbagsMen’swearFashionaccessoriesSportswearWomen’swearMen’swearMid-endcosmeticsStores“SomeformermembercustomersofShanghaiParksonhavenowbecomemembersofshoppingmallsinsuburbanareas…Currently,manybrandsofyoungwomen’sweararefacingcompetitionfromfastfashionbrandsinshoppingmalls.”“Unlikehigh-enddepartmentstoresinShanghai,mid-endtrendyonesaredirectlyaffectedbyonlineshopping:eitherbrandshavetheirownflagshipstoresonline,orcustomersfindcheapersubstitutesontheinternet.”-Mr.Xu,MarketingManagerforaCompetitorinShanghai“Salesofluxurygoodsandjewelryhavebeenaffectedbyunfavorableeconomicsthisyear.”“BeijingParksonislessbadlyaffectedbye-commercethanbyshoppingmalls.Althoughthesalesofdepartmentstoreshasdeclinedcontinuously,thesalesandtrafficofshoppingmallshasincreasedcontinuously.”-Tang,FormerMerchandisingManager,BeijingParksonAffectedby…ShoppingmallsOnlineShoppingmallsOnlineComments“AnshanParksonislosingtraffictoanewlyestablisheddepartmentstoreacrossthestreet,whichhasaverylargeOFAlikeashoppingmall…thenewlyestablishedstorehasbetterfacilities,creatingabettershoppingexperience.Inaddition,ithasacinema,restaurants,andotherentertainmentfacilities…itsparkinglotislargerthanParkson’s,andismuchmoreconvenientforcustomers.”“Currently,onlineshoppingisnotpopularinAnshan.”-Mr.Li,MerchandisingManagerforaCompetitorDepartmentstorewithalargeOFAShoppingmalls“DepartmentstoresandshoppingmallsinNanninghavenotyetreachedthelevelofoversupplybutmanyprojectsareunderconstruction…”“Atleast10%ofdepartmentstores’customertraffichasbeenlosttoshoppingmallswhichfeaturepopularfastfashionbrands…”-Mr.HuangOperatingManagerforaLocalCompetitor1-BeijingFlagshipStore:down7%in2011,affectedbyaweakmacroeconomicsituationandintensifyingcompetitionfromnearbyplayers16BeijingFlagshipStore大悅城君太中友BasicsPositioningHigh-endLocalRankingNo.2/3GFA(m2)60,889Storeage18yearsPropertyownershipDirectlyownedPrepaidcardpercentage40%TopmerchandisingcategoriesWomen’sapparel,jewelry,luxuryFinancials(2011)GMV(RMBMN)2,214Netconcessionairerate121%XidanCommercialDistrictLocalMarketSSSGdroppedinmostBeijingdepartmentstoresin2012Anoversupplyofmid-andmid-to-highenddepartmentstoresParksonGMVdownby7%in2012Goodlocation,largeoperationalarea,attractivetocustomers;GMVmainlysupportedbyahighproportionofpre-paidcardusersfromnearbygovernmentsandSOEsHigh-endpositioned,immunetoeffectsofe-commerceHighpercentageofjewelryandluxurygoodsandlesssatisfactoryperformanceinkeymerchandisingcategoriesSalesofjewelryandwatchesaffectedbymacroeconomyCosmeticspronetocompetitionfromtheXidanDistrict

Source:Companyinformation,BDAinterviewsandanalysisNote:1.Netconcessionairerate(grossmargin)istheconcessionairerateminusmajoroperatingcosts.Parkson西單商場(chǎng)LocalMarketShoppingmallshaveyettoprevailOnlineshoppingdoesnotbringsignificantimpacttoDSduetothelowerpenetrationthancoastalcitiesParksonGMVupby6%in2012Enjoysfirst-moveradvantageinthelocalmarketwithwell-establishedbrandnameGoodlocationinacentralcommercialdistrictHighestproportionofprepaidcardsinthelocalmarketCompetitivemerchandisinginallcategoriesSSSGdrivenbyincreasedsalesofhigh-endcosmeticsbrands2-KunmingBolianStore:upby6%in2011,thankstoagoodlocationandfirst-moveradvantage;yetlocalmarkettobeoversuppliedbyshoppingmalls17KunmingBolianStore昆明百貨王府井百貨金格金鷹NWDSParkson#2

Source:Companyinformation,BDAinterviewsandanalysisBasicsPositioningMid-endtrendyLocalRankingNo.1Floorarea(m2)28,056Storeage10.3yearsPropertyownershipLeasedPrepaidcardpercentage30%TopmerchandisingcategoriesCosmeticsFinancials(2011)GMV(RMBMN)1,197Netconcessionairerate20%SanshiStreetCommercialDistrictQingnianRoadCommercialDistrictBaitaRoadCommercialDistrictParksonBolian3-ShanghaiNineSeaStore:downby11%in2011,trafficsqueezedbypopularsuburbanshoppingmallsandincreasedonlineshoppingtrendsamongyoungpeople18ShanghaiNineSeaStoreNWDS太平洋百貨OPAParksonHuaihaiRoadCommercial

ZoneLocalMarketToomanydepartmentstoresinthecentralcommercialdistrictHighpenetrationrateofonlineshoppingamongyoungpeopleShoppingmallsinsuburbanareashavedivertedcustomertrafficParksonGMVdownby11%in2012LocatedinthecentralcommercialdistrictandiswellrecognizedinlocalmarketNomerchandisingadvantageovercompetitorsandkeymerchandisingcategoriesvulnerabletoonlineshoppingandfastfashionbrandsSalesofyoungwomen’sapparelmarkedlydownMen’scasualwearandwomen’sshoesarealsoaffectedbyonlineshoppingBasicsPositioningMid-endtrendyLocalRankingNo.7Floorarea(m2)26,786Storeage15.7yearsPropertyownershipLeasedPrepaidcardpercentage<5%TopmerchandisingcategoriesWomenapparel,men’swear,andcosmeticsFinancials(2011)GMV(RMBMN)940Netconcessionairerate21%

Source: Companyinformation,BDAinterviewsandanalysisLocalMarketOnlineshoppinghasalowpenetrationinAnshanNotypicalshoppingmallinAnshanLittlecompetitioninthelocalmarketParksonGMVdownby2%in2012Mid-endpositioning,featureshigh-endcosmeticbrandsunavailableelsewhereinthelocalmarketHighestpercentageofpre-paidcardusersamonglocalcompetitorsandsuccessfulpromotionalactivitiesSlightlyaffectedbyanewlyopenedlarge-OFAdepartmentstoreacrossthestreet4-AnshanStore:downby2%,growinglocalmarketbutitstrafficaffectedbyanewlyopenedlarge-OFAdepartmentstoreacrossthestreet19AnshanParksonStore遠(yuǎn)東NWDS新瑪特StationSquareCommercialDistrictBasicsPositioningMid-endLocalRankingNo.1Floorarea(m2)42,574Storeage9.7yearsPropertyownershipDirectlyownedPrepaidcardpercentage20%TopmerchandisingcategoriesWomen’sapparel(24%),footwear(15%),sportswear(15%)Financials(2011)GMV(RMBMN)846Netconcessionairerate18%

Source: Companyinformation,BDAinterviewsandanalysisParkson新瑪特5-UrumqiJCEStore:upby9%,thankstoitsestablishedbrandnameandcompetitivemerchandising,nosolidimpactfromshoppingmallsoronlineretailing20UrumqiJCEStore丹璐時(shí)代廣場(chǎng)匯嘉ParksonYouhaoCommercialDistrict仁和春天天山百貨ZhongshanRoadCommercialDistrict亞新廣場(chǎng)

Source:Companyinformation,BDAinterviewsandanalysisLocalMarketAnoversupplyofdepartmentstoresatlocalmarketsShoppingmallsarestillataearlystageofdevelopmentLowpenetrationofonlineshoppingParksonGMVupby9%in2012Long-termrelationshipwithlocalleaderofdepartmentstoresWellestablishedbrandandloyalcustomerbaseSufficientpopularbrandsWomenandmen’sapparelbothaffectedbyincreasedcompetitionBasicsPositioningMid-endLocalRankingNo.2-3Floorarea(m2)67,507Storeage9.2yearsPropertyownershipLeasedPrepaidcardpercentage40%TopmerchandisingcategoriesN/AFinancials(2011)GMV(RMBMN)821Netconcessionairerate18%太百6-NanningStore:down4%,affectedbytherapidgrowthofshoppingmalls21NanningParksonStoreChaoyang

CommercialDistrict九一廣場(chǎng)夢(mèng)之島Qixing-Gucheng

CommercialDistrict南寧百貨

Source: Companyinformation,BDAinterviewsandanalysisLocalMarketPlentyofdepartmentstoresincorecommercialdistrictsShoppingmallslocatedinsub-commercialareasemergingrecentlyE-commercehashadalimitedimpactonlocaldepartmentstoresParksonGMVdownby4%in2012Positionedasmid-endtrendydepartmentstore,vulnerabletoshoppingmallsLocatedinthecentralcommercialdistrictSingle-storesaleshavereachedaceilingBasicsPositioningMid-endLocalRankingNo.4Floorarea(m2)44,857Storeage7.7yearsPropertyownershipLeasedPrepaidcardpercentageLessthan5%TopmerchandisingcategoriesJewelry,watches,women’sapparel,andcosmeticsFinancials(2011)GMV(RMBMN)769Netconcessionairerate18%Parkson7-NanchangStore:up10%,benefitingfromgrowthinthelocalmarketandsuccessfulcosmeticsmerchandising;non-brandwomen’swearaffectedbyonlineretailing22NanchangParksonStore萬(wàn)達(dá)南昌百貨財(cái)富廣場(chǎng)NanjingxiRoadCommercialDistrictParkson天虹百貨ZhongshanRoadCommercialDistrict

Source: Companyinformation,BDAinterviewsandanalysisLocalMarketLimitednumberofshoppingmallsOfflinesalesofwomen’sapparelisaffectedbyonlineshoppingParksonGMVupby10%in2012NotagoodlocationandlowpercentageofprepaidcardsGoodmerchandisinginhigh-endcosmeticsWomen’sapparelhasbeenaffectedbyfastfashionbrandsBasicsPositioningMid-endtrendyLocalRankingNo.4Floorarea(m2)31,955Storeage8.9yearsPropertyownershipLeasedPrepaidcardpercentage<5%TopmerchandisingcategoriesWomen’sapparel,men’swear,cosmetics,andadultwomen’sapparelFinancials(2011)GMV(RMBMN)726Netconcessionairerate19%洪客隆8-HefeiStore:up7%thankstoarapidlygrowinglocalmarketunaffectedbyshoppingmallsatthemoment;yettraffictobedilutedgiventhemanyshoppingmallsinthepipeline23ParksonHefeiNo.1Store銀泰金鷹太陽(yáng)城鼓樓百貨Parkson金鷹合肥百貨OldTownCommercialDistrict

Source: Companyinformation,BDAinterviewsandanalysisBasicsPositioningMid-endtrendyLocalRankingNo.10Floorar