Daiwa Research initiated coverage on Baozun Inc. (09991) with a "buy" rating and a target price of HK$130.
The research house believes Baozun offers investors exposure to China's consumption upgrade trend, particularly in international brands, and is a proxy play for the growth of Alibaba's Tmall.
Baozun will report its 3Q results in late November. Daiwa expects weaker seasonality and brand optimisation initiatives to weigh on its 3Q revenue growth. Nonetheless, it expects 4Q revenue to recover on likely strong Double 11 sales.
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