Parkson Holdings Berhad is a listed company on the Bursa Malaysia Securities Berhad main

market and works numerous departmental stores under their brand name It is divided into retails
and investment business operating in South East Asia. There are few strengths and weaknesses
that can be identified based on the financial analysis. One of the strength of Parkson Holdings
Berhad is their barriers to entry. Economies of scale are the increases in proficiency and lower
creation costs that frequently come about because of an organization becoming bigger and
bigger. Since the company are established, they are frequently better situated to undermine on
cost. Other than that, PHB also has a great access to suppliers and strong existing distribution
channels. Therefore, PHB may have selective long haul contracts with key suppliers that will
make it troublesome for another participant to work in the business. Furthermore, PHB also has
large domestic market. Thus, the firm has great market intelligence on how the market works in
Malaysia.
As for weaknesses, PHB has low investment on their research and development. Sometimes it is
hard to enter a specific field or business in light of the fact that the suitable technology should be
fruitful is secured by a patent. In this way, the company could not utilize it or are left to attempt
and build up another innovation that may require heaps of cash to create. Besides, PHB also has
poor credit rating and profitability. The earnings per share had decreased mainly due to the
decreased in profit. Other than that, net cash has decreased in 2014 as the company purchased
more treasury shares and earned lesser proceeds from loan and borrowings in 2014. Due to the
decreased of the operating profit the interest cover has dropped and causes the operating profit
insufficient to cover the interest payable. Thus, this will also lead to creditors losing their
confidence in lending money in near future.
Due to governments regulation, PHB reported a relatively negative same store sales growth of
4.5% (2014:- 0.1%) as local consumer sentiments were impacted by the inflationary pressures
arising from the governments implementation of subsidy rationalization programs, the central
banks tightening of measures to curb household debts and the implementation of Goods and
Services Tax on 1st April 2015. Thus, this could be one of the non-financial factors to be
considered before making any investment.(PHB Annual Report,2015)

Besides that, staff motivation plays an important role as it is one of the non-financial factors that
should be taken into account before investing. In this case, PHB did a great job in attracting,
retaining and motivating employees which are pursued under five Human Resource pillars. PHB
continues to emphasize employee engagement activities thus in return created a fully engaged
workforce who are happily motivated and effective team players. Other than that, salary and
benefits are continuously benchmarked to remain relevant and competitive. This is to create a
strong performance culture with linkage between business and individual performance.
Overall, Parkson Holdings Berhad is not suitable to be invested in even though it has good
customers satisfaction, staff motivation and corporate social responsibility. The depreciating in
currency and rising cost of living due to government subsidy rationalization, the company
became less profitable over the years. Therefore, it is difficult for the company to keep up in the
industry as the market is competitive and the company has poor management of its debts.

PARKSON 5 YEARS REVENUE AND PROFIT TREND