According to the Morgan Stanley report, they were not pleasantly surprised by Esprit (00330.HK), due to weak revenue and short-term cost savings. The bank reiterated that Esprit is in a period of transformation, and that a number of good and bad quarters will not change the bank's opinion. The bank maintained the Sijie “reduced holdings” rating and target price of $8.2.

According to the bank, the company's management indicated in a conference call that additional provisions would be made for store closure and leasing, indicating that its core market in Europe is still full of challenges. In addition, another 10 stores in Europe are undergoing closing procedures, and profitable stores are expected to take longer to improve due to the difficult trade environment.

According to Daimo, although management believes that the transformation plan is progressing smoothly, it believes that it will take at least 12 months or more to have a positive effect on performance.