Citi: Cuts Samsonite's target price to HKD 22, maintains "High Conviction Outperform" rating

Citi released a research report stating that it has lowered Samsonite's full-year sales forecast for this year to a year-on-year decline of 6%, and adjusted net profit forecast to a year-on-year decline of 25%, reflecting the short-term weakness in the travel industry; the target price has been reduced from HKD 30 to HKD 22. Considering the low valuation and the potential for future improvement, as well as the revaluation opportunities brought by future dual listings, it still maintains a "highly confident outperform the market" rating. Citi expects that Samsonite's sales in the second quarter will decline by 6% year-on-year at fixed exchange rates, further widening from the 5% decline in the first quarter, mainly affected by weakened travel demand, which is consistent with the results of its recent luxury goods consumption survey. Citi also anticipates that Samsonite's gross margin and adjusted EBITDA margin for the second quarter will remain at 59% and 16.6%, respectively, roughly flat quarter-on-quarter, believing that there will be quarter-on-quarter improvement in the third quarter driven by a low base and a rebound in tourist numbers. Before the second quarter results are released, the bank has lowered its revenue forecast for 2025 to 2027 by 7% to 10%, reduced adjusted EBITDA forecast by 18% to 19%, and lowered adjusted net profit forecast by 23% to 28%, reflecting traveler pressure and tariff uncertainties