It is certainly true that not all retail is the same and that has
been quite clear over the last six months in China's retail sector. Food
retailers like Sun Art (OTCPK:SURRY) and China Resources Enterprise (OTCPK:CRHKY) are struggling through weak same-store sales growth, but footwear and sportswear retailers like Belle (OTCPK:BELLY), Daphne (OTCPK:DPNEY), and ANTA Sports (OTCPK:ANPDY) are doing quite a bit better despite unimpressive same-store growth in the footwear business.
I have mixed feelings about Belle shares after this better than 10% move since my last update.
I think Belle has a very good business (six of the top ten women's
footwear brands in China and a long run of double-digit returns on
capital), but management still has a lot of work to do with its online
strategy. I'm also a little concerned about valuation, as the market
seems to already be pricing in at least 8% annual free cash flow growth
across the next decade.
Continue reading here:
Belle International Fairly Popular Despite Some Core Weakness
No comments:
Post a Comment