[ET Net News Agency, 3 July 2018] Nike reported strong 4Q and raised FY2019 revenue
guidance. Jefferies Research expects Shenzhou International (02313) to benefit from the
improving outlook as Nike is its largest client.
The research house maintained its "hold" call and HK$88 target price as Shenzhou shares
now trade at a similar PE multiple to Nike.
Jefferies estimated >20% order growth for Shenzhou from Nike for 1H 2018 given Nike's
continued improving revenue momentum. It likes high visibility for Shenzhou order growth
due to efficiency and cost advantage versus peers which could meet clients' increasing
requirements on speed.
It also expects orders from Puma to remain strong and orders from Adidas to grow 10%.
Orders from Uniqlo should see high-single-digit growth due to capacity allocation as
casual wear orders are usually of lower margins. (KL)