【出版时间及名称】：2010年5月南非零售行业研究报告
        【作者】：摩根大通
        【文件格式】：pdf
        【页数】：80
        【目录或简介】：
We revise our earnings estimates, target prices and recommendations
following recent interim results announcements and trading updates.
There are no changes to our stock recommendations, we but changed our
order of preference. Woolworths, Shoprite and JD Group are our top
picks in the sector. We view the recent pull back in share prices of
the retailers as a good buying opportunity for investors.
• From a top down point of view, we continue to favour the food
retailers over the discretionary retailers (clothing and furniture
retailers). We think that the food retailers could re-rate and out perform
discretionary counters as food inflation accelerates (Shoprite and Spar
are our preferred counters). Within the discretionary space, we
recommend that investors are overweight those counters that stand to
benefit more from a cyclical recover in earnings, helped by a low
earnings base, scope to improve cost efficiencies and unwind in bad debt
costs (Woolworths and JD Group and our preferred entry points).
• In our view Woolworths has the most potential to surprise the
market with strong earnings growth over the next 12 to 18 months;
helped by accelerating sales growth, further improvement in gross profit
margin and tight cost control. We think that its robust cash flows will add
further impetus to the share price, with scope for special dividends or
share buybacks. We calculate that the cash flows could allow Woolies
to distribute c10% of its market capitalization or cR1.9bn (cR1.1bn
normal dividend plus cR0.8bn of free cash) to shareholders over the
next 12 to 18 months (ignoring tax impact on distribution).
• In our view, JD Group still offers good value to longer term
investors, despite its weak trading update. We think that the recent
pull back in share price is overdone and view as a good entry point
(trading on a 12m fwd price to net asset value of 1.2x; a c25% discount
to Lewis and the SA Banks).