Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

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News from Caixin

Equity Bottom-Up

LVMH Moet Hennessy Louis Vuitt / Equity Bottom-Up

LVMH Moet Hennessy Louis Vuitt (LVMUY US)

<ul><li>LVMH Moet Hennessy Louis Vuitton SE is not worried about sales pressure on the Chinese mainland as long as its clientele there is growing overall, according to Chief Financial Officer Jean-Jacques Guiony.</li><li>The world’s largest luxury goods group is looking to attract more Chinese shoppers amid a broader slowdown in demand for expensive bags, jewelry, and perfume.</li><li>Many consumers have been making their purchases outside of China, especially in Japan, where the yen is weak, the French conglomerate disclosed in its 2024 first-quarter earnings released last week.</li></ul>

LVMH Moet Hennessy Louis Vuitton SE is not worried about sales pressure on the Chinese mainland as long as its clientele there is growing overall, according to Chief Financial Officer Jean-Jacques Guiony.The world’s largest luxury goods group is looking to attract more Chinese shoppers amid a broader slowdown in demand for expensive bags, jewelry, and perfume.Many consumers have been making their purchases outside of China, especially in Japan, where the yen is weak, the French conglomerate disclosed in its 2024 first-quarter earnings released last week.

LVMH Remains Committed to China Even Amid Sluggish Sales 

Equity Long-Short

Mo Aziz

China Tourism Group Duty Free Corp Ltd / Equity Bottom-Up

China Tourism Group Duty Free Corp Ltd (601888 CH)

<ul>
<li>European luxury goods maker enjoyed its best week in the past 52 weeks, spurred by better-than-expected results by LVMH, the industry leader and widely viewed as the bellwether  </li>
<li>China's market was cited as resilient and very strong in certain categories, defying the general market perception that Chinese demand is soft</li>
<li>The key European luxury goods share price has risen by an average of 8.2% YTD, China Tourism Group share price performance has lagged. Good buying opportunity    </li>
</ul>


European luxury goods maker enjoyed its best week in the past 52 weeks, spurred by better-than-expected results by LVMH, the industry leader and widely viewed as the bellwether  
China's market was cited as resilient and very strong in certain categories, defying the general market perception that Chinese demand is soft
The key European luxury goods share price has risen by an average of 8.2% YTD, China Tourism Group share price performance has lagged. Good buying opportunity    


LVMH & Richemont Said Chinese Demand for Luxury Goods Is Strong; POSITIVE for China Tourism Group

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<ul><li>
<a href="https://www.smartkarma.com/entities/christian-dior-se" target="_blank" data-smartkarma-citation="entities:21415:1" rel="noopener">Christian Dior SE (CDI FP)</a>’s 41.2% owned listed subsidiary, <a href="https://www.smartkarma.com/entities/lvmh-moet-hennessy-louis-vui" target="_blank" data-smartkarma-citation="entities:21072:1" rel="noopener">Lvmh Moet Hennessy Louis Vuitton (MC FP)</a>, has outperformed Christian Dior shares by over 31% since LVMH made a non-binding proposal to acquire the US luxury jewellery and speciality retailer <a href="https://www.smartkarma.com/entities/tiffany-co" target="_blank" data-smartkarma-citation="entities:14729:1" rel="noopener">Tiffany &amp; Co (TIF US)</a>.</li></ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/184/744/original/image_9822495321611673131890.png?1611673132" class="editor-image img-responsive" data-smartkarma-image-id="184744"></figure><ul>
<li>After a lawsuit and a counter lawsuit by Tiffany and LVMH respectively, (LVMH requested an amended deal due to COVID-19 led disruptions) LVMH finally managed to complete the acquisition on 7<sup>th</sup> January for $15.8bn, a 3% discount to LVMH’s original offer.</li>
<li>Dior is 97.4% owned by the Arnault Family and therefore has a very low free float compared to LVMH’s 50% free float. The lack of liquidity meant that Dior failed to keep up with LVMH’s share price movement, even though Dior’s only source of revenue/income is LVMH.</li>
<li>Dior’s current NAV discount is 23.9%, compared to an average of 4.0% during 2018-3Q2019. As the trading volume of LVMH normalises following the Tiffany transaction, we expect Dior’s NAV discount to return to the undisturbed long-term average discount range of 10-18%.</li>
</ul>


Christian Dior SE (CDI FP)’s 41.2% owned listed subsidiary, Lvmh Moet Hennessy Louis Vuitton (MC FP), has outperformed Christian Dior shares by over 31% since LVMH made a non-binding proposal to acquire the US luxury jewellery and speciality retailer Tiffany &amp; Co (TIF US).
After a lawsuit and a counter lawsuit by Tiffany and LVMH respectively, (LVMH requested an amended deal due to COVID-19 led disruptions) LVMH finally managed to complete the acquisition on 7th January for $15.8bn, a 3% discount to LVMH’s original offer.
Dior is 97.4% owned by the Arnault Family and therefore has a very low free float compared to LVMH’s 50% free float. The lack of liquidity meant that Dior failed to keep up with LVMH’s share price movement, even though Dior’s only source of revenue/income is LVMH.
Dior’s current NAV discount is 23.9%, compared to an average of 4.0% during 2018-3Q2019. As the trading volume of LVMH normalises following the Tiffany transaction, we expect Dior’s NAV discount to return to the undisturbed long-term average discount range of 10-18%.


Christian Dior: Holdco Discount Could Normalise Following the Completion of Tiffany Acquisition

Quality-first, Business-perspective, Long-term, Urbem (HK) Limited

Urbem Capital

Quality-first, Business-perspective, Long-term

<ul>
<li>Despite the elevated valuation, family-controlled Hermes demonstrates its superior quality from a business-owner perspective, and hence, is worth following among patient investors;</li>
<li>At the same time, we find that the French heritage name has been increasingly APAC-driven in recent years and can very likely continue to benefit from rising emerging Asia in the foreseeable future.</li>
</ul>


Despite the elevated valuation, family-controlled Hermes demonstrates its superior quality from a business-owner perspective, and hence, is worth following among patient investors;
At the same time, we find that the French heritage name has been increasingly APAC-driven in recent years and can very likely continue to benefit from rising emerging Asia in the foreseeable future.


Hermes: An Increasingly APAC-Driven Story

LVMH Moet Hennessy Louis Vuitton SE / Event-Driven

LVMH Moet Hennessy Louis Vuitton SE (MC FP)

<ul>
<li>Smartkarma recently added a new company/holdco to its list of holdcos under the incredibly useful Holdco Monitor tool.</li>
<li>The latest addition to the tool is <a href="https://www.smartkarma.com/entities/christian-dior-se" target="_blank" data-smartkarma-citation="entities:21415:1" rel="noopener">Christian Dior Se (CDI FP)</a> and its listed subsidiary <a href="https://www.smartkarma.com/entities/lvmh-moet-hennessy-louis-vui" target="_blank" data-smartkarma-citation="entities:21072:1" rel="noopener">Lvmh Moet Hennessy Louis Vuitton (MC FP)</a>, the world leader in luxury goods. Both these companies are controlled by the French billionaire Bernard Arnault.</li>
<li>Below, we analyse the current holdco discount/premium to assess if there’s an opportunity for a market-neutral pair trade once the current ban on short selling is lifted.</li>
</ul>


Smartkarma recently added a new company/holdco to its list of holdcos under the incredibly useful Holdco Monitor tool.
The latest addition to the tool is Christian Dior Se (CDI FP) and its listed subsidiary Lvmh Moet Hennessy Louis Vuitton (MC FP), the world leader in luxury goods. Both these companies are controlled by the French billionaire Bernard Arnault.
Below, we analyse the current holdco discount/premium to assess if there’s an opportunity for a market-neutral pair trade once the current ban on short selling is lifted.


Christian Dior/LVMH: Discount Is Attractive but Liquidity & Pre 2017 Discount Make It a Risky Trade

France

Christian Dior SE manufactures luxury products such as upscale clothing, champagne and wines, cognac and spirits, luggage and leather goods, perfumes and cosmetics, and jewelry and watches.  The Company markets its products internationally.

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Christian Dior SE (CDI FP)

LVMH Remains Committed to China Even Amid Sluggish Sales

LVMH Moet Hennessy Louis Vuitton SE is not worried about sales pressure on the Chinese mainland as long as its clientele there is growing overall,...

Caixin Global

LVMH & Richemont Said Chinese Demand for Luxury Goods Is Strong; POSITIVE for China Tourism Group

European luxury goods producers performing well and attributed to Chinese consumers. China Tourism Group is the primary beneficiary of Chinese...

Mo Aziz

Christian Dior: Holdco Discount Could Normalise Following the Completion of Tiffany Acquisition

Dior’s current NAV discount is 23.9%, compared to an undisturbed long-term average discount range of 10-18%. As trading volumes of LVMH normalises...

Oshadhi Kumarasiri

Hermes: An Increasingly APAC-Driven Story

The French heritage story has been increasingly APAC-driven in recent years and can very likely continue to benefit from rising emerging Asia in...

Urbem Capital

Christian Dior/LVMH: Discount Is Attractive but Liquidity & Pre 2017 Discount Make It a Risky Trade

Smartkarma recently added a new company/holdco to its list of holdcos under the incredibly useful Holdco Monitor tool. The latest addition to the...

Oshadhi Kumarasiri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

LVMH Remains Committed to China Even Amid Sluggish Sales

LVMH Moet Hennessy Louis Vuitton SE is not worried about sales pressure on the Chinese mainland as long as its clientele there is growing overall,...

Caixin Global

LVMH & Richemont Said Chinese Demand for Luxury Goods Is Strong; POSITIVE for China Tourism Group

​European luxury goods producers performing well and attributed to Chinese consumers. China Tourism Group is the primary beneficiary of Chinese...

Mo Aziz

Christian Dior: Holdco Discount Could Normalise Following the Completion of Tiffany Acquisition

Dior’s current NAV discount is 23.9%, compared to an undisturbed long-term average discount range of 10-18%. As trading volumes of LVMH normalises...

Oshadhi Kumarasiri

Hermes: An Increasingly APAC-Driven Story

The French heritage story has been increasingly APAC-driven in recent years and can very likely continue to benefit from rising emerging Asia in...

Urbem Capital

Christian Dior/LVMH: Discount Is Attractive but Liquidity & Pre 2017 Discount Make It a Risky Trade

Smartkarma recently added a new company/holdco to its list of holdcos under the incredibly useful Holdco Monitor tool. The latest addition to the...

Oshadhi Kumarasiri

European luxury goods producers performing well and attributed to Chinese consumers. China Tourism Group is the primary beneficiary of Chinese...