HERMèS INTERNATIONAL S.A.(RMS.FP)：2Q22 STRONG BEAT AT APEX OF LUXURY

　　2Q22 results significantly beat consensus
Hermès (RMS FP) released 2Q22 results: 2Q22 revenue was EUR2.7bn, +19.5% CER YoY, beating consensus of +13.2% CER YoY. During 2Q22, Europe (+32% CER YoY) and Americas (+26% CER YoY) led the growth, while APAC ex Japan sales grew 10% CER YoY and made up 45% of total sales in 2Q22. In 2Q22 by business group, leather goods revenue grew 8.5% CER YoY, beating consensus of +6.95% CER YoY. During 1H22, revenue reached EUR5.5bn, +23% CER YoY, retail sales grew 23% CER YoY while wholesale grew 25% CER YoY driven by recovery of travel retail. APAC ex Japan grew 15% CER YoY in 1H22.
　　1H22 operating income reached EUR2.30bn, with a historical high 42.1% margin, beating consensus of EUR1.97bn. 1H22 net profit reached EUR1,641mn (at 30% margin) vs. EUR1,174mn in 1H21, up 40% YoY. Hermès had net cash of EUR7,685mn as of June 30, 2022.
　　Trends to watch
　　Takeaways from management’s earnings call are as follows.
　　1) China sales grew double-digits YoY in June 2022, with 1H22 sales higher than 1H21. Management was confident about July 2022 growth rates in China. Hong Kong SAR sales held up thanks to local demand.
　　2) Hermès increased prices for watches and jewelry by 3-5% in early July 2022, which brought overall 2022 price increase to 4% (3.5% in 1H22).
　　3) Hermès aims to achieve same gross margins across its 16 métiers.
　　4) Plans to open new stores in Asia and the Americas.
　　5) Hermès’ communication expenses are concentrated on events rather than media, the latter being common among peers.
　　6) 78% of customers on Hermès e-commerce platforms are new.
　　Financials and valuation
　　We keep our 2022 and 2023 earnings forecasts unchanged. The stock is trading at 51.0x 2022 and 44.4x 2023 P/E. We maintain OUTPERFORM and TP of EUR1,600 (53.3x 2023e P/E). Our TP offers 19.9% upside.
　　Risks
　　Health-related disruptions; production ramp up misses our expectations.
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   【免责声明】本文仅代表第三方观点，不代表和讯网立场。投资者据此操作，风险请自担。