- Buy Entry – 16.3 Target – 18.0 Stop Loss – 15.5
- Samsonite International S.A. is a Hong Kong-based company principally engaged in the design, manufacture, sourcing and distribution of luggages, business and computer bags, outdoor and casual bags, travel accessories and slim protective cases for personal electronic devices. The Company operates its business through three segments. The Travel Bag segment is engaged in travel products with suitcases and carry-ons of three main categories, including hard-side, soft-side and hybrid luggages. The Casual Bags segment is engaged in daily use, including different types of backpacks, female and male shoulder bags and wheeled duffel bags. The Business Bags segment is engaged in business use, including rolling mobile office bags, briefcases and computer bags.
- China eases travel quarantine. Travelers to the country must spend seven days in centralized quarantine, then closely monitor their health for another three days at home, according to a government protocol released Tuesday by National Health Commission. Previously, China required up to 21 days of hotel quarantine.
- Air travel continued to recover. According to IATA, total demand for air travel in April 2022 (measured in revenue passenger kilometers or RPKs) was up 78.7% YoY. April domestic air travel was down 1.0% compared to the year-ago period, a reversal from the 10.6% demand rise in March. This was driven entirely by continuing strict travel restrictions in China, where domestic traffic was down 80.8% year-to-year. Overall, April domestic traffic was down 25.8% versus April 2019. International RPKs rose 331.9% YoY in April.
- 1Q22 results review. Net sales jumped by 67.7% YoY to US$576.6mn. Operating profit arrived at US$58.1mn compared to a loss of US$47mn during the same period last year. Profit attributable to the equity shareholders arrived at US$16.4mn in 1Q22 compared to a loss of US$72.7mn in 1Q21. The effects of the COVID-19 pandemic on demand for the company’s products moderated due to the continued rollout and effectiveness of vaccines leading governments in many countries to further loosen social-distancing, travel and other restrictions, which has led to the continuing recovery in travel.
- The updated market consensus of the EPS growth in FY22/23 is 1,120%/47.5% YoY, respectively, translating to 17.3×/11.7x forward PE. The current PER is 29.6x. Bloomberg consensus average 12-month target price is HK$22.60.
(Source: Bloomberg)