KUALA LUMPUR: Shares of department-store operator Parkson Holdings fell in mid-afternoon trade on Wednesday, Nov 18, despite reporting core earnings in line with analysts' forecasts.

At 3.15pm, it fell 15 sen to RM5.29 with 701,800 shares done.

OSK Investment Research said Parkson's 1QFY2010 core earnings of RM64.7 million (up 7.6% y-o-y) were in line with its full-year forecast.

China, Vietnam and Malaysia registered same-store sales growth of 7.5%, 22% and 4% respectively. On adjusting for the change in accounting treatment, direct sales dropped slightly by 1.2% while commissions from concessionaire sales grew 10.8%.

Despite the flat commission rate and direct sales gross margin, earnings before interest, tax, depreciation and amortisation (Ebitda) rose by 1.3 percentage points on higher operating income and operating efficiency.

"We maintain our FY2010 and FY2011 earnings forecast. Our target price is unchanged at RM6.60 based on a RNAV of 24 times price-to-earnings ration (PER) for its China operation, 12 times PER for its Malaysia operations and 10 times PER for both Vietnam and the excluded stores," the research house said.