Why Are Agencies Not Optimistic About Prada'S Product Sales?

According to the world clothing and shoe net, institutions are not optimistic about the current situation.

UBS and CLSA were awarded the "sell" rating, but Deutsche Bank maintained a "buy" rating even though they were not optimistic about Prada's future performance.

Deutsche Bank: the market situation may turn better in the second half of the year, according to Deutsche Bank's research report, although Prada is...

Deutsche Bank: the market may turn better in the second half of the year.

According to Deutsche Bank's research report, although Prada is trying to get out of the bottom, this year's business environment still has no help for the company.

Therefore, Deutsche Bank lowered Prada's profit forecast and reduced its target price from 41 yuan to 35 yuan.

However, Deutsche Bank expects the market situation to turn better in the second half of the year, which is likely to bring a significant rebound in gross margin, so Prada will be given a "buy" rating.

Deutsche believes that the US business is still on the sidelines and expects to be better. The European market has been affected by the decline of foreign tourists and sales have been dismal, but Japan has maintained a strong performance level.

Deutsche Bank estimated that the impact of exchange rate on gross margin was neutral, and business support was flat. In the first half of, it increased by 6% in the first half and increased by 1% in the second half.

In this way, Prada's revenue and gross profit are under constant pressure.

Deutsche also pointed out that customers are the center of Prada's strategic thinking.

Prada has found that retail outlets have the opportunity to optimize, so they will selectively shut down outlets and reduce their size, while their Miu Miu

New shops will be opened in Paris at the end of this year.

Prada believes that after the active expansion of the European network, there will be new opportunities for wholesale business.

On the product, Prada will cater to the public's expectations, but will also maintain brand characteristics through innovation and quality, and will pay attention to the 1000-1500 Euro product market again.

CLSA: it is suggested that investors should find another opportunity to enter the market.

CLSA maintained Prada's first quarter profit in 2017, that is, net profit increased by 12%. Most of the bad news has been reflected in the stock price.

But CLSA believes that the industry is still in pition, so investors are advised to wait for better market timing.

CLSA believes that high profit areas such as Hong Kong and Macao

The performance has also begun to turn weak, so Prada is focusing on increasing operational efficiency and adjusting strategies to cope with the new market environment.

The bank pointed out that Prada Asia's market performance was the worst, retail revenue fell 4.4%, if it was in local currency, it fell by 16%, while sales in the mainland were positive, but the Hong Kong and Macao markets were facing the problem of falling passenger numbers.

CLSA reports that Prada's annual revenue is flat and its net profit is down 27%, reflecting the Gao Ganggan business model of luxury brands.

Because of the negative factors such as high fixed costs, EBIT fell 28%, net profit fell 27%, 'Prada' EBITDA profit margin dropped from 31.5% to 27.7%, and 'Miu Miu' fell from 6.6% to 2%.

The bank said that although Prada faced a weaker profit, it expected that management would cut costs, so it would maintain its expectations and give the selling price and the target price of HK $21.9.

UBS: Prada valuation is not attractive

UBS believes that Prada currently exists, valuations are higher than the same industry; UBS is worried about its leather business; the buying habits of Chinese and American consumers have raised questions about Prada's growth.

Therefore, UBS first gave Prada the "sell" rating and the target price of HK $20.

Because Prada's market is targeted at products between 1600-3500 euros, the depreciation of the euro makes the company raise prices everywhere.

While competitors have increased the supply of less than 1250 euros, and Prada's competitive advantage in the current industry has become increasingly weak.

And in the survey of UBS, Prada's ranking in China and the United States is also lower than that in the same industry.

Therefore, UBS expects that Prada leather products will not achieve target returns in the short term.

UBS said Prada's EBITDA rate will be less than 30%, and the company plans to eliminate the effect of variable factors (LFL) business profit of more than 5%.

However, the bank is expected to have only 2% in the next 3 years, and it is expected that the target will be affected by factors such as digital investment and rental pressure in the medium term.

UBS forecasts that Prada's earnings per share forecast for the period from 2016 to fiscal 2017 (up to the end of January) is 0.13 euros, indicating that Prada's current valuation is quite 18.7 times the current fiscal year.

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