Robinson Department Store

Promising days ahead BUY

Robinson Department Store Plc (ROBINS)

Hong Kong last week at which Khun Nujjaree Sunthadvanich (Financial Controller) and

Khun Phanthep Luangwiriya (Investor Relations) met with 18 investors. Investors

seemed positive with regards to its position as offering the broadest department

store coverage that taps into strong demand in the provinces, its aggressive store

expansion which is supported by a solid financial position, and the low competition in

its market, the middle to high-income department store segment.

Highlights:

ROBINS stands by its ambitious plan to add five stores annually, beginning in 2012,

more active than its 1-2 stores per year in the past. It will bring outlet numbers up

to 49 by the end of 2016 from 30 (11 in Bangkok and 19 in upcountry) at end-2012.

The five stores it plans for this year are all upcountry, four as lifestyle centers and

one in a shopping complex: Kanchanaburi (Feb 2013), Ubon Ratchathani (Apr 2013),

Sakon Nakorn (3Q13), Surin and Saraburi (4Q13). The Ratchadapisek branch will be

closed in March 2013 upon the expiration of rental contracts.

2013 CAPEX is set at Bt3.7bn, funded entirely by internal cash flow. With its current

net cash position, it may increase its debt to finance expansion in the medium

term.

The new lifestyle center format (launched in 2010 and including three stores at the

end of 2012) has been well accepted, generating high sales volume from the

department store area to a level close to that of stores in shopping complexes,

plus high rental income from rental space.

Benefits of the new lifestyle center format include: 1) a shorter payback period

thanks to the rental income; 2) more opportunities to invest in mid-sized to small

cities; 3) more flexibility, i.e. it is free to make its own investment decisions as to

where the stores will be located and when they will open.

To date, ROBINS has department stores in twenty of Thailand's 77 provinces and

plans to double this to 40 within the next three to five years.

One of its goals is to raise the proportion of sales from its private brand to 10%

from 8% now over the next few years.

2013 sales growth target is 17-18% with SSS growth of 8-9% and gross margin

expansion of 20 basis points.

ROBINS is still focusing on expansion in the domestic market, where it sees a lot of

opportunity. Meanwhile, it is in the initial stage for studying overseas investment.