HSBC: Maintains a "Buy" rating, believing that Yihuo does not have a strong motivation to acquire ParknShop.

J.P. Morgan released a research report stating that there are recent rumors that CK Hutchison Holdings and Yonghui Superstores are in talks to acquire PARKnSHOP and merge it with its subsidiary, Watsons. The bank believes that Yonghui may not have a strong motivation to acquire PARKnSHOP, as the supermarket sector in Hong Kong is not an area they are interested in increasing their holdings, and PARKnSHOP has a low profit margin, with an EBITDA margin of less than 1% last year, and EBIT recording a slight loss. If we calculate based on the rumored valuation of PARKnSHOP of around 3 to 4 billion USD in 2013, assuming an EBITDA profit margin of 0.7%, the implied enterprise value multiple would exceed 200 times; even if we assume the profit margin will recover to the peak of 6.4% in 2021, the valuation would still be at 23 times. J.P. Morgan stated that due to limited disclosure of information, a detailed analysis cannot be done at this time; they are maintaining their "hold" rating and target price of 68 Hong Kong dollars for CK Hutchison Holdings unchanged.