Prada (1913 HK). Dividend at Risk. Sell. 41% Downside

Sell Prada (1913 HK): Accounting Inflates Margins and Facilitates Excessive Dividends

'Experiential Travel' Could Dampen Sales of Luxury Goods For Years; Avoid Luxury Retailers

Director | Exposing Creative Accounting, Bucephalus Research Partnership

Robert Medd

Director | Exposing Creative Accounting

Exposing Creative Accounting

Bucephalus Research Partnership

Bucephalus Research Partnership Limited. Exposing Creative Accounting.

At the Bucephalus Research Partnership (BRP) we analyse financial statements using our accountant's practical experience and our own quantitative algorithms for corporate governance, accounting risk and peer performance.

Our thematic research refines our unique algorithms while our single stock research focuses on examples where we discover a significant gap between published accounts and business reality.

​Bucephalus Research Partnership:
- Is an independent fee-based research service
- Does not take proprietary positions, long or short
- Does not solicit business or fees from the corporates we review

Forensic Accounting

<p>Prada is talking about re-building the brand. They have stopped discounting and they are re-organising. However, it appears to us that management may have a different agenda and minorities could be in for a rough ride. We believe that profits are suffering due to a lack of productivity, not discounting and the balance sheet has been hollowed out by excessive dividends, related party deals and vanity projects. Don’t be fooled by the creative accounting, this brand is expensive and offers little value.</p>

Prada is talking about re-building the brand. They have stopped discounting and they are re-organising. However, it appears to us that management may have a different agenda and minorities could be in for a rough ride. We believe that profits are suffering due to a lack of productivity, not discounting and the balance sheet has been hollowed out by excessive dividends, related party deals and vanity projects. Don’t be fooled by the creative accounting, this brand is expensive and offers little value.

SELL Prada: There Is Little Value in This Brand. Fair Value HK$7.90

Prada S.P.A.

SELL Prada: There Is Little Value in This Brand. Fair Value HK$7.90