20250331-招银国际-新秀丽-01910.HK-Weak_FY24_dragged_by_TUMI_and_American_Tourister,_1Q25_sales_to_decline_LSD-MSD_7页_1mb

Samsonite (1910 HK) Summary

Core Content

Samsonite reported mixed performance in FY24, with flat organic net sales and a net profit decline of 13% YoY to US$346 million. The company's FY24 revenue was US$3.6 billion, slightly below the previous year's high due to the normalization of travel frequency and the impact of the 2023 revenge travel theme. The performance was offset by declines in TUMI and American Tourister, which dragged down overall results.

Key Financial Performance

• Revenue:

  • FY23A: US$3,683 million
  • FY24A: US$3,589 million
  • FY25E: US$3,731 million
  • YoY growth: -2.5% in FY24, expected to grow 4.0% in FY25E.

• Net Profit:

  • FY23A: US$396.9 million
  • FY24A: US$345.6 million
  • FY25E: US$351.8 million
  • YoY growth: -12.9% in FY24, expected to grow 1.8% in FY25E.

• EPS (Reported):

  • FY23A: US$0.24
  • FY24A: US$0.24
  • FY25E: US$0.24 (Consensus: US$0.26)

• P/E Ratio:

  • FY23A: 10.0
  • FY24A: 9.8
  • FY25E: 9.8
  • P/E implies a 13x FY25E valuation.

Brand Performance

• Samsonite:

  • Achieved 3.3% organic sales growth in FY24, driven by a strong holiday season and shifts in US wholesaler order timing.
  • 4Q24 showed a 4.6% YoY increase in sales.

• TUMI:

  • Full year FY24: -0.8% YoY organic sales decline, but 4Q24 showed strong growth in Europe (+12%), Latin America (+17%), and North America (+5%).
  • Asia was a drag with -0.2% YoY.
  • In 2M25, TUMI's sales declined by 11% on TMTB but rose 26% on JD.com.

• American Tourister:

  • Organic sales declined by 6.1% YoY in FY24, mainly due to weak North American wholesaler demand and intense competition in India.
  • Excluding India, the decline was 1.9% YoY.

China Market Insights

• Travel Recovery:

  • As of 2M25, international air passenger traffic recovered to 119% of 2019 levels, while domestic traffic reached 107%.
  • Positive momentum for the luggage market is expected to continue.

• Online Sales:

  • Samsonite saw a -7% decline in sales on TBTM and -18% on JD.com in 2M25.
  • Sales on Douyin surged by 200% YoY, indicating strong digital marketing impact.
  • TUMI had mixed results, with -11% on TBTM and +26% on JD.com.

Valuation and Investment Outlook

• Target Price:

  • Revised down to HK$25.35, a 9% decrease from the previous target of HK$28.00.
  • Implies a 13x FY25E P/E ratio.

• DCF Analysis:

  • DCF-based target price: HK$25.4
  • Enterprise value: HK$5,808 million
  • Total equity value: HK$4,713 million
  • Net debt: HK$1,095 million
  • WACC: 8.598%
  • Long-term growth: 2.0%

• Sensitivity Analysis:

  • DCF value per share is sensitive to changes in WACC and long-term growth rate, with a range of values from HK$24.2 to HK$26.6 depending on assumptions.

• Investment Rating:

  • Maintained as BUY, with a target price of HK$25.35.
  • The rating is based on expected organic sales growth of 1.5% and net profit growth of 1.8% YoY in FY25E, as well as ongoing share buybacks and the progress of dual-listing.

Share Performance

• Current Price: HK$18.52
• 1-month change: -14.1%
• 3-month change: -14.3%
• 6-month change: -9.9%
• 12-month change: -20.6% (relative to market)

Shareholding and Financials

• Shareholding Structure:

  • Schroders PLC: 6.0%
  • Bank of New York Mellon Cor: 5.4%

• Balance Sheet Highlights:

  • Total assets increased from 2022 to 2025E, reaching HK$5,483 million.
  • Total equity and liabilities: HK$5,483 million in 2025E.

• Cash Flow:

  • Net cash from operations: US$580 million in FY25E.
  • Net change in cash: US$99 million in FY25E.

Profitability Metrics

• Gross Margin:

  • FY24: 60.0%
  • FY25E: 59.5% (stable)

• Operating Margin:

  • FY24: 17.5%
  • FY25E: 17.1% (declining slightly)

• ROE:

  • FY24: 23.6%
  • FY25E: 20.5%
  • Expected to decline further to 18.2% in FY26E.

Risk and Disclaimer

• Risks:

  • Travel frequency normalization and uncertainty in the premium retail sector recovery.
  • Past performance does not guarantee future results.
  • Actual outcomes may differ materially from those in the report.

• Analyst Certification:

  • The analyst certifies that the views expressed reflect their personal views and that they are not directly tied to compensation.
  • No trading in the stock within 30 days prior to report issuance.

• CMBIGM Ratings:

  • BUY: Potential return of over 15% over the next 12 months.
  • HOLD: Potential return of +15% to -10% over the next 12 months.
  • SELL: Potential loss of over 10% over the next 12 months.

• Important Disclosures:

  • The report is not tailored to individual investors.
  • CMBIGM does not provide investment advice and encourages consulting a financial advisor.
  • The report is for intended recipients only and may not be reproduced without consent.

Conclusion

Samsonite's FY24 results were mixed, with flat sales and a decline in net profit, driven by weak performance in TUMI and American Tourister. While the company is expected to see modest growth in FY25E, the target price has been revised downward due to lower earnings estimates. The brand's digital efforts, particularly on Douyin, show promise, and the overall travel market in China is on a recovery path. Despite the challenges, the company remains a BUY with a target price of HK$25.35.