【巴克莱资本】中国及香港消费零售产业分析44页11June2.pdf

C, BARCLAYS
EQUITY RESEARCH
11June2012
CHINA AND HONG KONG RETAILERS
SECTOR UPDATE
Hong Kong/China Apparel, Footwear
SSS bottoming out; time to accumulate
Textiles
2-NEUTRAL
retailers with pricing power or property
Unchanged
ng kong
Time to accumulate; updating PTS and earnings forecasts for our coverage universe
Stores/Broadlines
We think 1 H marked the bottom of SSS and margins we expect the outlook to turn better
2-NEUTRAL
from the latter part of 3Q on a low base and loosening macro policies. We cut our FY12E
Unchanged
earnings for the retailers by up to 7%, bringing us 5% below consensus for most stocks
full list of our ratings, price target and
we cover. Share prices for most retail stocks have fallen by over 20% since the March
gs changes in this report, please see
results announcement, and we believe prices already reflect the slightly weaker earnings
te envisage Stocks we like are trading on mid-teens FY12E P/E with earnings growth in
long Kong/China Apparel, Footwear
the teens. We think that from a risk-reward perspective, valuation looks more compelling
Textiles
looking into 2H and FY13. within our coverage universe, our preferred stocks include
andy Huang
Golden Eagle, Belle, Lifestyle and Prada(all rated 1-OW
+85229034883
huangqbarcap. com
1QS weaker SSS continuing in 2Q: Most China retailers reported weaker SSS in 1Q due
lys Bank, Hong Kong
to a higher base, slower economic growth and more aggressive promotional activities
We expect the trend to continue in 2Q By product mix, the slowdown looks more
Phoebe Tse
material in hard luxury goods, such as high-end watches, which recorded zero or low
85229034285
phoebe.tse(@barcap.comn
single-digit growth at many department store companies. Jewellery sales momentum
Barclays Bank, Hong Kong
was impressive in 1Q despite a high base, but momentum may be slowing in 2Q
Vineet Sharma. CFA
Inventory building up:; margins becoming a major overhang: With slower sales growth
in FY12E, inventory will increase. Indeed, some department stores have suggested that
vsharma@barcap.com
promotional activities are now largely initiated by the brands, which are likely to bear
Barclays Bank, Hong Kong
more of the promotion cost Given low SSS, aggressive promotion activities and high
operating expenses, we believe margins are a major overhang for retailers in 2012. We
factor in-100 bps margin decline in 20 12E, in line with consensus
ally.wang@barcap.com
Well-positioned companies: We believe two groups of retailers will be in a better
Barclays Bank, Hong Kong
position to protect margins this year: 1) companies with strong pricing power, mostly
foreign brands(eg, Prada, Samsonite and L Occitane); and 2) retailers with property
ownership and therefore limited rental pressure(e.g. Golden Eagle and Lifestyle
Hong Kong retailers: April Hong Kong retail sales growth was rather weak, at +11% y/
despite mainland visitor arrivals at+24% yy. We believe this is due to the continued
challenging macro sentiment and to the higher base following the earthquake in Japar
last year that led to stronger HK spending. Lifestyle recently indicated that May SSS
growth was"very strong on its Thankful Week event We believe