Samsonite's 3Q sales growth pegged at 13-15%

Will it be badly affected by Asia's slowdown?

Maybank Kim Eng expects Samsonite's total 3Q sales growth to come in at 13-15%, similar to 1H13. 

Here's more:

We now forecast Asia (40% of sales) to grow 14.8% YoY, vs. our earlier projection of 22% as we now adopt more conservative assumptions for the China and India markets.

We note that in July and August, China recorded flat YoY growth, down from 8% YoY in 1H13. India saw a price increase of around 10%, but that has been offset by forex. 

Growth momentum in Korea also decelerated to 20% YoY in local currency terms due to the high base effect. North America is likely to experience growth in the low teens next year, vs 20-30% in 1H13. Latin America is still looking at mid- to single-digit growth.

We lower our TP 4% to HKD22.01 based on a DCF-approach, as we cut our FY13F/14F/15F by 6%/12%/15% to factor in further sales slowdown in Asia in 3Q13, while a sharp slowdown in South Korea from the high base effect also surprised us on the downside.

We anticipate the lacklustre 3Q13 could disappoint the market expectation. The counter has already outperformed by 22% against the broader market. Trading at 17.7x FY14F PER, at the high-end range of its trading PER band, we believe the stock is fully valued.