Nomura raised its target price for Samsonite International (01910) to HK$15.5 from HK$15.3 and maintained its "neutral" rating.
The research house said Samsonite's 1H net profit was a strong beat due to better cost controls and a lower tax rate, excluding the one-off impairment costs. A key positive in 1H is the improvement in operating cash flow, which went up 98% to US$113mn (excluding IFRS16 impact) through much tighter working capital control.
Looking into 2H, Nomura expects sales and margins in the US to remain weak, with sales down, and higher tariff to erode GPM. It lifted its FY2019-21 earnings forecasts by 1-4% to reflect better cost controls but slightly offset by lower GPM and one-off impairment costs for FY2019.