Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>This follows up on our piece, <a href="https://www.smartkarma.com/insights/ticking-different-a-comparison-of-the-world-s-listed-luxury-watch-retailers-with-exposure-to-rolex" target="_blank" data-smartkarma-citation="insights:241854" rel="noopener">Ticking Different: A Comparison of the World's Listed Luxury Watch Retailers With Exposure to Rolex</a>, where we follow five listed luxury watch retailers.</li>
<li>This is an update on the names as well as a valuation pit stop, heading into the earnings season for a few of the March-end companies </li>
<li>We like <a target="_blank">Oriental Watch (398 HK)</a> for its net cash position (~60% of market cap) and 12% dividend yield, and <a target="_blank">The Hour Glass (HG SP)</a> for its buybacks and superior metrics.</li>
</ul>


This follows up on our piece, Ticking Different: A Comparison of the World's Listed Luxury Watch Retailers With Exposure to Rolex, where we follow five listed luxury watch retailers.
This is an update on the names as well as a valuation pit stop, heading into the earnings season for a few of the March-end companies 
We like Oriental Watch (398 HK) for its net cash position (~60% of market cap) and 12% dividend yield, and The Hour Glass (HG SP) for its buybacks and superior metrics.


Timeless: A Follow-Up on the Luxury Watch Retailer Space And Their Impressive Capital Allocation

<ul>
<li>Overall revenues, down 0.8% YoY, were a tale of two halves: H2 revenues were up 9.4% YoY and 10% HoH, led by a recovery in China (82% of sales).</li>
<li>
<a href="https://www.smartkarma.com/insights/ticking-different-a-comparison-of-the-world-s-listed-luxury-watch-retailers-with-exposure-to-rolex" target="_blank" data-smartkarma-citation="insights:241854" rel="noopener">Ticking Different: A Comparison of the World's Listed Luxury Watch Retailers With Exposure to Rolex</a> establishes why we believe momentum in China will sustain into FY27 and earnings will improve.</li>
<li>The stock trades at 8.9x/6x FY26 (unadjusted)/FY27e PE, with a 11.3%/16.7% dividend yield based on our numbers, with 60% of the market capitalization in cash</li>
</ul>


Overall revenues, down 0.8% YoY, were a tale of two halves: H2 revenues were up 9.4% YoY and 10% HoH, led by a recovery in China (82% of sales).

Ticking Different: A Comparison of the World's Listed Luxury Watch Retailers With Exposure to Rolex establishes why we believe momentum in China will sustain into FY27 and earnings will improve.
The stock trades at 8.9x/6x FY26 (unadjusted)/FY27e PE, with a 11.3%/16.7% dividend yield based on our numbers, with 60% of the market capitalization in cash


Oriental Watch (398 HK) FY26 Results: Inflection In H2, Good Set Up For FY27

<ul>
<li>
<a href="https://www.smartkarma.com/entities/oriental-watch-holdings-limited" target="_blank" data-smartkarma-citation="entities:19950:1" rel="noopener">Oriental Watch (398 HK)</a>  stands out for its dividend yield of 12.6%, the highest in the peer group. The stock is priced as an income vehicle with a 7.7x P/E.</li>
<li>
<a href="https://www.smartkarma.com/entities/hour-glass-ltd" target="_blank" data-smartkarma-citation="entities:8879:1" rel="noopener">The Hour Glass (HG SP)</a> leads in operating quality, with the best EBITDA margin (20.6%), highest net margin (13.4%), and strongest ROE (18.0%) in the group, at a 9.7x PE.</li>
<li>
<a href="https://www.smartkarma.com/entities/watches-of-switzerland-group" target="_blank" data-smartkarma-citation="entities:34600:1" rel="noopener">Watches of Switzerland (WOSG LN)</a>  commands a clear valuation premium at 16.8x P/E and 7.9x EV/EBITDA, reflecting its Rolex partnership moat and US growth runway.</li>
</ul>



Oriental Watch (398 HK)  stands out for its dividend yield of 12.6%, the highest in the peer group. The stock is priced as an income vehicle with a 7.7x P/E.

The Hour Glass (HG SP) leads in operating quality, with the best EBITDA margin (20.6%), highest net margin (13.4%), and strongest ROE (18.0%) in the group, at a 9.7x PE.

Watches of Switzerland (WOSG LN)  commands a clear valuation premium at 16.8x P/E and 7.9x EV/EBITDA, reflecting its Rolex partnership moat and US growth runway.


Ticking Different: A Comparison of the World's Listed Luxury Watch Retailers With Exposure to Rolex

<ul>
<li>
HK Watch Sales Recovery: HK jewelry/watch sales rose +27% YoY in Mar-2026, accelerating from +9% in Oct-2025, signaling a clear demand recovery.</li>
<li>
Faster HK sales recovery could drive earnings higher for FY27e (vs net income of 208 mn HKD for FY26e), with upside to a 13% yield at a 100% payout. </li>
<li>
 Undemanding Valuation: 7.7x FY26e PE at HKD 3.30; net cash of HKD 2.03/share (61% of market cap) underpins a 13% FY26e yield.</li>
</ul>



HK Watch Sales Recovery: HK jewelry/watch sales rose +27% YoY in Mar-2026, accelerating from +9% in Oct-2025, signaling a clear demand recovery.

Faster HK sales recovery could drive earnings higher for FY27e (vs net income of 208 mn HKD for FY26e), with upside to a 13% yield at a 100% payout. 

 Undemanding Valuation: 7.7x FY26e PE at HKD 3.30; net cash of HKD 2.03/share (61% of market cap) underpins a 13% FY26e yield.


Oriental Watch (398 HK): Cheap, Cash-Rich, and Catching a Tailwind in HK Watch Demand

Director, Head of Research, Smartkarma

Pranav Rao

Director, Head of Research

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Event-Driven

<ul>
<li>Welcome to Curator’s Cut - a fortnightly roundup of standout themes from the 1,400+ insights shared on Smartkarma.</li>
<li>In this cut, we look at where value remains in a difficult year for luxury, review momentum in offshore services, and assess two sides of the insurance sector. </li>
<li>Want to dig deeper? Comment or message with the themes you'd like to see highlighted next.</li>
</ul>


Welcome to Curator’s Cut - a fortnightly roundup of standout themes from the 1,400+ insights shared on Smartkarma.
In this cut, we look at where value remains in a difficult year for luxury, review momentum in offshore services, and assess two sides of the insurance sector. 
Want to dig deeper? Comment or message with the themes you'd like to see highlighted next.


Curator's Cut: Luxury Losing Lustre, Offshore Revived & Insurance's Two Sides

Hong Kong

Oriental Watch is an investment holding company primarily engaged in the trading of watches and clocks through an extensive retail network in Greater China. It sells watches from numerous prestigious brands, including Rolex, Tudor, Bulgari, Breitling, and Longines. The company also engages in property holding and securities investment activities. Headquartered in Central, Hong Kong, the company was founded in 1961.

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Oriental Watch (398 HK)

Timeless: A Follow-Up on the Luxury Watch Retailer Space And Their Impressive Capital Allocation

We follow up with our luxury watch retailers exposed to Rolex and update readers on each retailer's impressive capital allocation plans with...

Sameer Taneja