【行业研究报告】新秀丽-Another high growth year for Asia

10May202310May2023CMBInternationalGlobalMarkets|EquityResearch|InitiationSamsonite(1910HK)AnotherhighgrowthyearforAsiaChina’sreopeningisnotonlythelastmissingpuzzletoglobaltravelrecovery,butalsoservesasanothersoliddrivertoextendSamsonite’searningsupcycle,subsequenttothatinthefirsttwomonthsoftheyear.WeforecasttheeventwillprovideastrongboosttoAsiarevenuefortheyearwith1)55%YoYgrowththatlookstobeanothernewhigh,subsequentto20%/33%growthin2020-21,and2)amoreaccretiveregionalmixthatleadsanexpandedGPM.Speakingofthelatter,ahigherTUMIcontribution(currentlyc.25%)wouldalsobehelpfulasthebrandhashistoricallybeenstrongintheregion.Thesedriversshouldaidmanagementtoattainitstargetfortheyear,andSamsonite’supcoming1Qreportingislikelytobejustoneoftherobustquartersalongthisre-ratingtrajectory.Inthemediumterm,aneatoperationstructure,amorefocusedproductofferingandanincreasingbrandawarenessshouldcontinuetomakeSamsoniterelevanttotheChinastoryinwhichweseeamplepotentialfortheregion’smarketshare(mid-singledigit)tocatchupwiththatofSamsonite’sglobalshare(mid-teen).WeinitiateSamsoniteatBUY,andconsidertheresumptionofdividendpayoutanevent-drivencatalysttoourTP.Managementguidance.Managementtargetslow-to-midteensalesgrowthfor2023.Comparedtothatof2019,theindicationshouldtranslateto10-15%stackedgrowth,orcFX30%-ishYoYgrowthvs2022.ManagementalsolooksforGPMtoexpandandhencea17%+adjustedEBITDAmargin.Meanwhile,ourrevenueestimaterepresentsc.110%vs2019andouradjustedEBITDAmarginsissetas17.3%,respectively.Ourforecastsarerelativelyconservative,considering2M23revenuealreadytracking17%abovepre-COVIDlevel.WeseeupsideinourforecastswithmoresoliddatapointfromSamsonite’s1Qrelease.Inventory/marketingexpense.Apotentiallystrong1Qmatcheswellwithaslightlyhighinventorylevelbyend-22,andwethinkmanagementisdiligenttoplanforthequarter.WhileanimminentlyhighermarketingbudgetlookstobesystematicacrossbrandsinChinapost-COVID,weexpectSamsonitetospend6.5%ofrevenuetocateramoreaggressivelaunchschedule,asalmost40%oftheexistingSKUswerenewsince2022.Valuation.OurTPisDCF-based.Inourmodel,weassumeWACCof8.2%,risk-freerateof3.5%,riskpremiumof5%andbetaof1.5.OurTPimplies17.2xend-23EP/E.TargetPriceHK$30.18Up/Downside29.2%CurrentPriceHK$23.35ChinaConsumerJosephWONG(852)39000838josephwong@cmbi.com.hkStockDataMktCap(HK$mn)33,567.4Avg3mthst/o(HK$mn)136.752wHigh/Low(HK$)25.20/14.62TotalIssuedShares(mn)1437.6Source:FactSetShareholdingStructureSchrodersPLC5.9%BankofNewYorkMellonCor5.9%Source:HKExSharePerformanceAbsoluteRelative1-mth-5.8%-5.7%3-mth-0.2%4.6%6-mth24.6%1.6%Source:FactSet12-mthPricePerformanceSource:FactSetEarningsSummary(YE31Dec)FY21AFY22AFY23EFY24EFY25ERevenue(US$mn)2,0212,8803,9384,4254,884YoYgrowth(%)31.542.536.812.310.4Netprofit(US$mn)14.3312.7322.5379.5431.6YoYgrowth(%)na2,086.73.117.713.7EPS(Reported)(US$)0.010.220.220.260.30P/E(x)195.610.413.311.39.9P/B(x)3.93.03.02.31.9ROE(%)2.236.327.024.622.1Netgearing(%)406.4291.3231.4177.3127.2Source:Companydata,Bloomberg,CMBIGMestimates