The Zhitong Finance App learned that Yamato released a research report stating that it reaffirmed the “buy” rating of L'Occitane (00973) and raised the target price to HK$28.

According to the report, the company announced that the controlling shareholder decided not to make a full purchase offer, which is believed to be due to factors such as the strong stock price affecting the purchase price and the lack of more viable financing channels. Although the proposed transaction has not yet been completed, it is believed that the privatization plan proposed a lower sales price of 26 yuan, which will become a new psychological support level for L'Occitane's stock price. At the same time, it also indicates that the market will refocus on fundamentals in the future, believing that the company will still be attractive in the long run.

The bank revealed that the company's management still maintains the 2024 fiscal year guidelines. It is expected that L'Occitane brand revenue and operating profit margin will achieve year-on-year growth in medium units and low double digits, while ELEMIS and SDJ revenue will also increase by double digits and three digits respectively. Considering SDJ's profit margin growth was stronger than expected, the bank expects operating profit margin for FY2024 to exceed the guideline by 12%. However, due to increased marketing in the Chinese market, Daiwa lowered its earnings per share forecast for the 2024-2025 fiscal year by 2% to 5%.