Daiwa maintained its sell rating on 3368.HK shares and cut its profit forecast for 2015-2016 by 10-12%.

The Beijing-based department store operator announced on the same day that its 2014 net profit fell 33.5% to 235 million yuan. The decrease in net profit was partly due to a decline in same-store sales and higher operating costs, but the decline was lower than market expectations.

Daiwa said that due to the more competitive retail industry, Parkson's operating environment is still full of challenges, the bank remains cautious about the prospects of Parkson.

Daiwa also said that while Parkson's expansion into the food and beverage business could increase the company's source of revenue, it could also pose challenges given competition in these areas.