[ET Net News Agency, 20 March 2020] Nomura slashed its target price for Samsonite
(01910) to HK$6 from HK$16 but upgraded its rating to "neutral" from "reduce".
The research house said Samsonite's FY2019 adjusted net profit was down 22.7%, missing
Nomura's estimate, mainly due to tax expenses. The adjusted EBITDA margin declined 207bp,
mainly due to the 107bp GPM contraction and the increased distribution expense ratio of
115bp.
For January-February 2020, net sales decreased by 11.2%, and Asia was hit the most, down
20.2% (China: -33.7%; HK: -57.7%). Management guided that overall sales for 1Q could drop
25-30%. With the ongoing global spread of COVID-19, Nomura believes it is not realistic to
assume any significant sales recovery in 2020, especially in light of the travel
restrictions imposed by many countries. Nomura cut its FY2020-21 adjusted net profit by
87%/23% to reflect the COVID-19 impact. (KL)