Introduction to this report:

The company is a leader in the luggage industry. Based on high-quality brand assets, channel operation efficiency continues to improve, and it is expected to steadily expand stores in the future to achieve high-quality growth.

Key points of investment:

Investment advice: The first coverage gives an “gain” rating. The company is a leader in the luggage industry. It is estimated that in 2024-2026, the company's net profit to mother will be 0.422/0.457/0.497 billion US dollars, respectively. The current stock price corresponding to PE is 9/9/8 times, respectively, giving it an “gain” rating for the first time.

The world's famous luggage brand is at the forefront of the industry. The company operates its own brands such as Samsonite, Tumi, American Tourister, etc., fully covering consumers in the middle and lower end markets, and sells to various markets such as Europe, America, and Asia. The CAGR of the company's operating revenue/net profit to mother in 2011-2023 was 7.4%/14.0%, respectively. Through a global layout, its share has steadily increased. According to Euromonitor data, the global luggage market size is 161.1 billion US dollars in 2023, and the CAGR is expected to be 7% in the next five years; of these, Samsonite's market share is 3.8%, second only to LV and Kering Group. The market share is expected to increase steadily in the future, benefiting from the collaborative development of multiple brands.

Based on high-quality brand assets, complemented by efficient channel operation capabilities, we continue to consolidate our competitive advantage.

1) Quality brands are the core and firmly occupy the consumer mentality. The main brand Samsonite has a wide range of products from mid-range to high-end. American Tourister pays more attention to popular and youthful needs, while Tumi mainly focuses on the high-end business luggage market. At the same time, the company continues to make efforts to expand categories, expand multi-functional products such as shoulder bags and handbags, and continue to raise consumer awareness through IP co-branding and celebrity endorsements. Following the recovery of consumption after the epidemic, the three major brands increased beautifully. In 2023, Samsonite/Tumi/American Tourister's revenue increased by 28%/34%/26%, respectively. 2) High-quality omni-channel development, continuous improvement in operational efficiency. As of 2024H1, the company had 1,083 self-operated stores, increasing DTC's revenue share to nearly 40%. At the same time, the company actively developed online channels and continued to steadily improve operational efficiency. The average single-store revenue CAGR of self-operated stores in 2020-2023 reached 43%.

Future outlook: 2024H1 Latin American and European markets are growing steadily, revenue in the North American market is flat, and the Asian market is slightly weak. In the future, the company will continue to promote a global layout and cultivate high-potential emerging markets such as Latin America. It is expected that the Latin American market business will grow rapidly, the business performance in Europe, North America and Asia will be steady, and the luggage leader will continue to grow at high quality.

Risk warning: terminal consumer demand falls short of expectations, store expansion falls short of expectations, industry competition increases risk