UBS Group released a research report stating that it maintains a "Buy" rating on SAMSONITE (01910), with the Target Price raised from 28 HKD to 29.8 HKD.
The report states that due to declining profits, SAMSONITE's stock price fell about 16% last year. There is hope that unfavorable factors affecting income in 2024 may dissipate, and business travel demand may improve, driving a rebound in profits. Along with the potential for a second listing in the USA to expand the Shareholder base, this could lead to a valuation reassessment in the medium term. UBS Group believes SAMSONITE has a strong free cash flow level and room for dividend increases, and expects better stock performance in 2025 compared to last year.
The bank stated that since 2018, SAMSONITE has been restructuring its supply chain, and currently, imports from China account for less than 10% of its sales in the USA. It is now predicted that sales could grow by 6% in 2025, with profit margins also expected to improve, resulting in an adjusted Net income growth of 9% for the year.
