Macquarie published research report Prada Prada (01913.HK) rating from underperform rose to outperform that the first half of 2017 sales performance is still affected by the macroeconomic impact, and geopolitical risk increases, but the company’s product quality , Operating efficiency and cost control to improve, 2017 annual profit forecast 3%, 2018 30%, target price from 18 yuan to 33 yuan.
The bank pointed out that its handbag business accounted for 60% of Prada core brand, the current sales are improving; Miu Miu footwear sales are also signs of growth. Analysts said the survey found that part of the handbag style Prada only goods in October, I believe is a strong positive information, handbags will help drive sales and earnings growth is expected same-store sales will be flat in 2018, while the first half of 2019 Return to positive growth.
The bank also pointed out that the Prada management in the roadshow, stressed the performance of the Chinese market improved, the Hong Kong market operating efficiency is also improving, Asia EBIT core profit margins are still the highest, and China is the highest. The company has improved its gross margin as a result of improved supply chain and increased self-manufactured products. At the same time, the cost is also reduced through staff turnover, rental adjustments and better administrative expenditure controls. Operating profit is expected to bottom out at 12% in the second half of 2017, then to 15% and 17% in the next two years respectively. Close to 16% of the luxury industry, but still lower than the average of 22% over the past five years.