20230510-招银国际-新秀丽-01910.HK-Another_high_growth_year_for_Asia_12页_1mb

Samsonite Equity Research Summary

Samsonite is positioned to benefit significantly from China's reopening, which is expected to drive substantial growth in its Asian operations. The company aims for low-to-mid teen sales growth in 2023, with revenue projected to exceed 2019 levels by 15%+ stacked growth, translating to approximately US$4.2 billion. This growth is fueled by a 55% YoY increase in Asia revenue, representing a new high after weaker performance in 2020-21. Key factors include a favorable regional mix and higher TUMI contribution, which could reach up to 25% of revenue, supporting gross profit margin (GPM) expansion to 17%+ adjusted EBITDA margin.

Financially, the report forecasts a 3-year revenue CAGR of 19% to US$4.9 billion by 2025, with strong momentum in Asia (26% CAGR). Travel remains dominant in sales, but non-travel categories are expected steady growth given business travel resumption. Analysts maintain a BUY rating with a target price of HK$30.18, implying 29.2% upside from current levels. This is based on a DCF model assuming an 8.2% WACC and 17.0x end-2023 price-to-earnings ratio.

Inventory is managed carefully, with a marketing spend of 6.5% of revenue anticipated to support aggressive product launches. Free cash flow is expected to strengthen, potentially enabling resumed dividend payments. However, risks include forex volatility, deteriorating brand equity, global economic downturn, intensified competition, and supply-chain issues. The company's strong operational structure and brand awareness position it well for market share gains in Asia, with potential to capture mid-single-digit growth against its global share.

Overall, the report highlights Samsonite's resilience and growth potential post-COVID, recommending investment amid high uncertainties.