Inditex Group Is On The Market In China.

The Spanish Inditex group, which owns Zara chain stores, is the largest fashion retailer in the world. It is optimistic about China's long-term growth and has not been affected by the economic slowdown because of its strong demand for parity products.

Inditex's share price has risen by 37% since the beginning of this year.

Many market watchers have pointed out that Inditex valuation is on the high side. Reuters data show that the company's share price is expected to be 34 times earnings per share in 2016, while its competitor Hennes&Mauritz has a P / E ratio of 24 times.

Inditex's Zara brand launched a minimalist straight cut garment this season. Its boots and trousers are in a soft color and is very popular with shoppers. Analysts estimate that the Chinese market accounts for about 7% of Inditex sales.

The cooling of demand in China has had an adverse effect on Western luxury brands such as Boboli and Hugo Boss, while mid-range brands such as Adidas and Zara have performed better.

In December 10th, Inditex CEO Pablo Isla told analysts: "the fashion demand in the Chinese market is huge, and our brand is in the market. China We are deeply convinced that the popularity is getting higher and higher. We still feel optimistic about the situation in the next five years.

The group this year Christmas season A good start and a trend oriented product make it more adaptable to environmental changes than competitors.

According to local currency, sales of Inditex increased by 15% on -12 3 November 1st, that is, same store sales fell slightly over the previous three months. But analysts pointed out that, under the influence of warm weather, Top Shop and so on. Competitor In the Christmas season, all of them started slowly, so Inditex's performance remained strong.

Anne Chris Ciro, an analyst at Societe Generale, said: "it can be said that after the fourth quarter, the performance of Inditex was as good as that in the three quarter."

In the 2-10 months of this year, the group's net profit increased by 20% to 2 billion 20 million euros (2 billion 200 million dollars), and sales increased 14 billion 700 million euros to 16%.

Isla revealed that Zara Home, Bershka and Stradivarius were especially good.

As a profit margin index of concern, Inditex's gross profit margin was 58.8%, a slight decrease, because the strong dollar raised Asian clothing prices, but it had a greater impact on Inditex competitors.

Inditex has increased the volume of purchases in Europe and the surrounding area, which helps the company to adapt to changes in fashion tastes faster and quickly launch new products.