汇丰银行全球奢侈品行业红牛归来狗年中国消费者回归但这样就足够了吗20183162页

Disclaimer&Disclosures:ThisreportmustbereadwiththedisclosuresandtheanalystcertificationsintheDisclosureappendix,andwiththeDisclaimer,whichformspartofit:Chineseconsumersareback,butwillthatbeenough?AsourChinaDeluxesurveysuggests,Chineseluxurydemandshouldremainstrongthisyear,notablyinAsia……withpositivetrendsmitigatedbyslowingmomentum,highvaluation,andFXheadwindsformostofourcoverageWepreferTiffanyandTapestry(bothBuy).InEurope,KeringisouronlyBuyEQUITIESGLOBALLUXURYGOODSMarch2018By:ErwanRambourg,AntoineBelge,Anne-LaureBismuth,AlexisCooper,GiulioPescatoreandMurielleAndre-Pinard1EQUITIES●GLOBALLUXURYGOODSMarch2018THISCONTENTMAYNOTBEDISTRIBUTEDTOTHEPEOPLE'SREPUBLICOFCHINA(THEPRC)(EXCLUDINGSPECIALADMINISTRATIVEREGIONSOFHONGKONGANDMACAO)Wehavelittledoubtthatin2018Chineseconsumptionwillonceagainhelpsupportglobalgrowthintheluxurysector.MuchofthatgrowthislikelytobenefitChinaitselfandthebroaderAsianregion,ratherthantheWest.However,growthmomentumhasslowed(withindustryconstantcurrencysalesgrowthslowingfrom9%in2017eto7%in2018e),valuationshavecomedownsomewhatbutarestillhoveringataround15-yearhighs,andFXis,fornow,veryunfavourabletoEuropeanplayers.The“ReturnoftheRedBull”ishappening,butitlookspricedin.Weareleftwithveryfewluxurystocksinourcoveragewithsignificantupside.WehaveBuyratingsonbothoftheUSstockswecover,TapestryandTiffany,andtheonlyEuropeanluxurystockwerateBuyisKering.Inourcoverage,wehavemoreBuysoutsideofluxury.TheChinesecomebackshouldcontinueWerecentlyspenttwoweeksinAsia,wherewemetwithbrands,distributorsandexperts(seeLuxuryPostcardfromHongKong,5February2018).CommentaryonChineseluxurydemandseemedgenerallybullish.China'sstrongluxurysalesgrowthshowsnosignofinflection.ThereboundsinluxurysalesinMacauandHongKongalsocontinue.TourismandsalesgrowthinHongKongsawanicereboundin2017afterthreeyearsofstruggle.EvenKoreantravelretailtrendsseemtohavepickedup,ashavetrendsinJapanandSoutheastAsia,withinboundChineseflowsanincreasinglyimportantfactor.Sure,muchofthe2017surgeisprobablyduetoamirroreffectofthe2016slump,butwebelieveChineseluxuryconsumptionhasreboundedthankstoamoreenthusiasticandyoungerconsumer;andthatenthusiasmshouldendure,asevidencedinourChinaDeluxesurveyalsopublishedtoday.OurChinaeconomistsaremorepositivethanconsensus,andleadindicatorsforthesectorsuchasMacaugaming,consumerconfidence-typemeasuresandequitymarketshavebeenverystrong.Allofthisbodesverywellforthe15listedluxurygoodscompaniesthatwecoverinthisreport.WebelieveoverallthatChineseconsumersnowrepresentcloseto40%ofourcoveredcompanies’salesandmoreimportantlylikelytwo-thirdsoftheincrementalgrowthprospectsfortheindustrythisyear.Inotherwords,thisiscloseto5pointsoutofthe7%growthwehavefactoredingloballyfortheindustry.TheactionshouldtakeplaceclosertohomeIn2017,ChinesedemandliftedChinasalesaswellasHongKongandMacaubutAsiagenerally,excludingGreaterChina,wasmoremutedasnotablyKoreaandTaiwanweighed.Europewasstrong,especiallyinH1,andtheUSwassolidthroughouttheyearbutthiswasverymuchdowntoenthusiasticlocalconsumersratherthantourists.Wesee2018asadifferentpicture.WeestimateChinaaswellasHongKongandMacautoalesserdegreeshouldcontinuetocompoundhighgrowthratesbutwethinkalltheso-called“lucky8”destinationsinAsiashouldbenefitfromChineseluxurygrowth,withthelikelyexceptionofTaiwan,amarketnowtoosmalltomovetheneedle.ExecutiveSummaryChineseluxurydemandshouldbestrongagainin2018,implyinggloballuxurysaleswillbesupportedConsumptiontotakeplaceathome,thenclosetohome,butlesslikelyintheWestMiFIDII–ResearchIsyouraccessagreed?CONTACTustodayEQUITIES●GLOBALLUXURYGOODSMarch20182WebelieveEuropewillseeweakerChineseluxurydemand(aspricearbitragehitstourismspending)andtheUScouldseeaslightslowdownaswell,inspiteofapositivewealtheffect.Onthepositiveside,Asia’smarginsarelikelytoinflate,notablyasChinaseesgoodoperatingleveragefromhighgrowth(andHongKongremainsastructurallyhigh-marginmarket).Onthenegativeside,Europemaysufferfrommutedsalesgrowthandmorelimitedmultiplepurchasing(whentravelling,touriststendtobuyforotherstoo,notjustforthemselves).Sowhynotbuytheentireluxurysector?WiththeChinesebackstronglyandinmostcasesrelativelysolidbrandequity,cashgenerationandtrackrecord,whynotjustbuytheentiresector?Ourviewhasn’treallychangedsincewepublishedour2018outlookinJanuary(seeEndoftheblingfling?10January2018):ourbasecaseisforthesector’ssecondderivativeofgrowthtoturnnegativeasindustrygrowthslowsto7%from9%theprioryear,leavingfewinterestingstockstobuy.Sure,theequitymarketshadaslight‘wobble’earlyintheyearandyes,someluxurycompanieshavedeliveredbetterQ42017growththanexpected,butthebroadpictureisthesameintermsofthelimitedupsideweseeformanyofthestocksinourcoverage.Asexplained,weexpectChinesedemandtocontinuetogrownicelybutafteraslightpick-upinlate2016andapropersurgein2017linkedtopent-updemand,thingsarealmostcertainlyboundtoslow.Thefactthatthesector'sPEvaluationisata15-yearhigh(12-monthforwardPEof21.3xvs18.5x