Towards Financial Freedom
BIG C Supercenter - Growth Hampered by Margins
In BIGC's FY12 announcement of its operating numbers, its revenue of THB112bn came within our and consensus' estimates of THB110bn and THB116bn respectively. We remain concerned over costs, which previously resulted in disappointing earnings in 3Q12, and expect 4Q12's reported earnings to contract by 32% y-o-y to THB1.6bn (vs consensus' THB2.0bn) due to an absence of insurance income that was recognized in the prior year. The company is expected to release its final quarter results in mid-February. We are now reviewing our recommendations.
Commendable sales numbers for FY12. BIGC announced its FY12 operating statistics
yesterday evening, with the following highlights:
Commendable sales numbers for FY12. BIGC announced its FY12 operating statistics
yesterday evening, with the following highlights:
- FY12 sales grew by 9.3% y-o-y to THB112bn
- FY12 same-store-sales growth (SSSG) was at 5.3%
- 4Q12 sales grew by 17.0% y-o-y to THB30bn
- 4Q12 SSSG was at 12.1%
- It added five hypermarkets, seven Big C Markets, 76 Mini Big Cs and 41 Pure Drugstores during the year, bringing the total number of stores to 113, 18, 126 and 91 respectively as of Dec12.
- 4Q12 results are expected to be released in mid-February.
Margins still a concern. The company attributed the strong 12% SSSG in 4Q12 to a low base effect due to floods from a year ago and several successful marketing campaigns tailored to attract customers e.g. its Golden Saturday Festival. As of Dec 2012, BIGC had 113 Hypermarkets, 18 Big C Markets, 126 Mini Big Cs, and 91 Pure Drugstores, which was slightly ahead of our assumptions of 112, 18, 126 and 90 respectively.
In line with our observation in 3Q12, which saw an earnings shortfall from rising costs from insurance, utilities and wages, we expect 4Q12's reported earnings to fall by 32% y-o-y to THB1.6bn, bringing the full-year number to THB5.8bn (below consensus' THB2.0bn and THB6.2bn respectively). We are now reviewing our recommendations.
Source: OSK
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