CICC: Raise Samsonite (01910) target price by 5% to HK$21 to maintain “outperforming the industry” rating

The Zhitong Finance App learned that CICC released a research report stating that it will maintain Samsonite's (01910) “outperform the industry” rating and raise the target price by 5% to HK$21, corresponding to 43% upward space. The target price is based on 12 times the 2027 price-earnings ratio. The current stock price corresponds to the 2026 and 2027 price-earnings ratios of 10.1 times and 8.1 times, respectively. Considering that BÉIS has been consolidated since the fourth quarter of 2026, and that better-than-expected global travel demand will drive sales growth and release operating leverage, the bank raised its 2026 and 2027 revenue forecasts by 2% and 8%, respectively, and raised the 2026 and 2027 net profit forecasts by 6% and 11%, respectively.

CICC's main views are as follows:

Results for the third quarter of 2026 exceeded unanimous market expectations

Samsonite announced results for the third quarter of 2026: net sales of US$873 million, flat year-on-year at the reported exchange rate, 0.6% year-on-year increase in fixed exchange rate (CER), an improvement over the 1.7% year-on-year decline in the second quarter, and generally flat to slightly lower than management's previous expectations. Excluding the impact of the Middle East and India, net sales for the third quarter increased 1.0% year over year at a fixed exchange rate. Excluding the one-time revenue of $12.8 million from US tariff rebates, the adjusted EBITDA margin was 14.3%, an increase of 20 basis points over the second quarter, mainly due to the negative impact of the operating leverage effect exceeding the increase in marketing investment.

Development trends

The key points discussed by the management of the results meeting are as follows:

1) Sales outlook: Management expects the year-on-year growth rate of net sales calculated at a fixed exchange rate in the fourth quarter of 2026 to reach high single-digit growth, including BÉIS and contributing to high single-digit growth.

2) Profit margin outlook: The adjusted EBITDA margin for the fourth quarter of 2026 is expected to improve month-on-month. Management has yet to provide formal Group performance guidance for 2027.

3) Management continues to advance strategy implementation around the four pillars of long-term growth.

4) Shareholder return: Management announced an additional $50 million share repurchase plan, and the target dividend ratio was maintained at 40% to 50% of the adjusted net profit.

5) Dual listing: The company no longer reaffirms the goal of completing the transaction within 2026.

Risk Alerts

Macroeconomic pressure; loss of asset impairment; increased external competition; increased competition among the company's brands; exchange rate fluctuations; uncertainty at the time of the second listing; and risks associated with acquisitions and integration of BÉIS.