Yamato: Raising Samsonite (01910) target price to HK$18.2 to reaffirm the improvement in business trends in the third quarter of the “buy” rating

The Zhitong Finance App learned that Yamato released a research report stating that it raised the target price of Samsonite (01910) from HK$17.8 to HK$18.2, reaffirming the “buy” rating and maintaining a valuation basis of 12 times the average profit per share based on the 2026-2027 forecast. The bank pointed out that Samsonite's third-quarter business trend was slightly better than expected at the time of the September update. Sales in the third quarter at a fixed exchange rate are expected to drop 0.5% year over year, and the performance is better than the 2% year-on-year decline in the second quarter.

The forecast is that the year-on-year decline in sales in the North American market will narrow from 6% in the second quarter to 4%; Asia's performance is superior to the 1% year-on-year increase in the second quarter. Among them, the Chinese market is expected to maintain the 9% year-on-year increase in the second quarter, the decline in the Indian market narrows, the Japanese market may be similar to the 3% year-on-year increase in the second quarter, and the Korean market may grow slightly slower; the performance of the European market may be similar to that of the second quarter, and the Latin American market is expected to be faster than the second quarter.

Yamato predicts that Samsonite's gross margin for the third quarter and adjusted EBITDA profit margin (excluding tariff refunds) will be 60.3% and 14.4%, respectively, similar to the second quarter.

The bank believes that the second quarter is already at a low point in business, and the trends from the third quarter and October to now are better than the second quarter and previous expectations. Organic sales are expected to increase slightly year over year in the fourth quarter, and are driven by pre-holiday channel replenishment. The trend in early October is encouraging.

In addition, the company plans to offset raw material cost inflation through price increases. Among them, the Asian market will be implemented in the third quarter, the European market in the fourth quarter, and the North American market may be implemented in early 2027. The bank expects that the BEIS merger will bring in incremental sales of about 60 million US dollars in the fourth quarter.