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Equity Bottom-Up

Belle International Holdings / Equity Bottom-Up

Belle International Holdings (2129452D HK)

Following the release of Belle’s second-quarter operating data, we have changed our 2017 footwear same-store sales decline assumption from 16.6% to 14.0% and our mainland average store unit decline from 2.0% to 2.2%. Belle’s total average retail store count in China was up by 2.1% year over year and down by 0.7% sequentially to 20,738 in the second quarter. We also fine-tuned our 2017 sportswear and apparel same-store sales growth from 8.5% to 6.0%, offset by an increase in average store unit growth from 9.7% to 10.0%.We are hesitant to reduce our same-store sales decline for the footwear segment beyond this year, as we are not yet confident that Belle will weather the structural challenge from online and new channels. As a result, our fair value estimate is HKD 4.9 per share, and shares are fairly valued. Our no-moat rating is unchanged.Analyst: Chelsey Tam

Following the release of Belle’s second-quarter operating data, we have changed our 2017 footwear same-store sales decline assumption from 16.6% to 14.0% and our mainland average store unit decline from 2.0% to 2.2%. Belle’s total average retail store count in China was up by 2.1% year over year and down by 0.7% sequentially to 20,738 in the second quarter. We also fine-tuned our 2017 sportswear and apparel same-store sales growth from 8.5% to 6.0%, offset by an increase in average store unit growth from 9.7% to 10.0%.We are hesitant to reduce our same-store sales decline for the footwear segment beyond this year, as we are not yet confident that Belle will weather the structural challenge from online and new channels. As a result, our fair value estimate is HKD 4.9 per share, and shares are fairly valued. Our no-moat rating is unchanged.Analyst: Chelsey Tam

Belle's Footwear Same-Store Sales Decline Improved