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雷达卡
内容简介
We highlight six main factors that could hamper
Esprit’s recovery process. The recent strategy
adjustment to focus on product is positive, but
execution risks remain high. We see near-term
share price downside, cut estimates, and reiterate
UW – though we remove our sentiment discount.
Share price rally too fast too soon? After a 27% run-up
since the IR day, the market is starting to price in a
V-shaped recovery back to profitability in F2014, but we
forecast that Esprit will still be loss-making. We think there
could be more downside before a U-shaped recovery.
We find the new plan more tangible and realistic…
We think Esprit is tackling the problems from the right
angle strategically. A move to a more vertical-retail-
oriented model and a focus on product improvement
could enhance competitiveness in the medium to long
run. We remove our 50% sentiment discount in valuation.
…but we highlight execution risk: Our six main
issues, in overview – the new product engine will take
time to build and ramp up; declining retail store
productivity still hinders cash flow and could lead to
further store closures; in wholesale, we see more space
reduction risk and margin erosion as more POS are
approaching minimum order thresholds.
We cut estimates and remain Underweight:We lower
2014e EPS by HK$0.32/sh and assume a net loss of
HK$0.10/sh – we see a longer time needed to break
even. We also cut our outer-year forecasts based on the
lower guidance in the new plan. Our EBITDA forecasts
are 31%, 66%, and 58% below consensus for F2013,
F2014, and F2015. Sustainable quality improvement in
sales productivity could make us more positive. Lead
analyst on Esprit is now Robby Gu.
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