Mon, Apr 21, 2014 - Page 13 News List

7-Eleven parent bets on books, deliveries for growth

By Amy Su  /  Staff reporter

President Chain Store Corp (PCSC, 統一超商) may see sales and profits grow more than 10 percent annually over the next three years, mainly driven by growth from its core retail business and e-commerce subsidiaries, Bank of America Merrill Lynch said in its latest report.

The foreign brokerage house raised its price for shares in the retailer — which operates the nation’s largest convenience store chain, 7-Eleven — to NT$262 last week, an increase of 20 percent from its previous forecast, based on its higher earnings projections for this and next year.

PCSC shares fell 1.11 percent on Friday to NT$222.5 in Taipei trading.

“We expect its [PCSC’s] core earnings to grow 11 percent and 18 percent in 2014 and 2015 respectively, thanks to strengthening [business of] Taiwan’s 7-Eleven and fast-growing affiliates,” the brokerage house said in the report.

Merrill Lynch said that PCSC may benefit from rising demand in the e-commerce sector, which may help the development of the company’s various subsidiaries, such as President Transnet Corp (統一速達), books.com.tw (博客來) and its online shopping portal, 7net.

Online shopping has increased demand for logistics services and home deliveries and the brokerage house believes President Transnet to be one of the major beneficiaries of this trend.

President Transnet, a home delivery service provider mainly held by PCSC is set to announce planned upgrades to its logistic center by investing about NT$1 billion (US$33.08 million).

The service is set to deliver about 100 million packages this year, compared with the 80 million it delivered last year, giving it more than 40 percent of the local market.

The company also aims to expand its business of delivering holiday gift boxes, which may show double-digit percentage points growth this year and account for 10 percent of President Transnet’s sales in three years.

PCSC’s two online shopping platforms, books.com.tw and 7net, should see moderate sales growth this and next year on the back of the rising popularity of e-tailing, the report said.

On Tuesday last week, books.com.tw announced plans to launch its store delivery service in Hong Kong, meaning that Hong Kong consumers could purchase books online and pick them up at a 7-Eleven store the next day.

“We may further extend the service to other kinds of products sold in the online store over the near future, if getting positive reactions to the service from consumers in Hong Kong,” a public communications specialist in books.com.tw told the Taipei Times by telephone.

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