HAITONG INT'L: Maintains a "outperform" rating on PRADA (01913) with a target price of HK$62.9.

HAITONG INT'L released a research report stating that considering the industry's recovery progress and the base period of last year, the forecast for PRADA's (01913) net profit attributable to shareholders in 2025-2027 is 8.9/9.7/10.5 billion euros (originally 9.72/10.88/11.91 billion euros), with year-on-year growth of 6.5%/8.7%/7.6% respectively. A 20XPE for 2025 is given (originally 25x), converted at a rate of 1 euro = 9 Hong Kong dollars (originally 8.7), with a corresponding target price of 62.9 Hong Kong dollars (-24%), maintaining an "outperform" rating. The report states that in Q3 of 25, the company's revenue was 1.33 billion euros, a year-on-year increase of 9% (revenue growth rate is on a fixed exchange rate basis, the same below). By brand, in Q3 of 25, Prada's revenue decreased by 1% year-on-year, a narrower decline compared to Q2 of 25 (-4%); Miu Miu's revenue increased by 29% year-on-year, last year's same period growth was 105% and was the highest base for the year, the brand's growth still shows resilience, with revenue in Q2 of 25 increasing by 40% year-on-year. Prada's leather goods accelerated, while Miu Miu's clothing continued to lead growth. In terms of regions, in Q3 of 25, Asia Pacific/Europe/North America/Japan/Middle East revenue increased by 10%/2%/20%/-1%/10% year-on-year, compared to Q2 of 25 (+11%/+4%/+14%/-8%/+25%), the North American market continued to accelerate and lead growth under the higher base situation, mainly driven by Prada, and the decrease in North American consumers purchasing in Europe. The Greater China market performed slightly better than expected during the holidays, but no clear signs of improvement in the retail environment were observed. The company believes it will be difficult for the industry as a whole to return to the high growth performance of the past 10 years. Looking ahead, optimism remains for Miu Miu's growth potential, mainly from 1) the brand's continued high-quality growth, with most of the growth under high base figures contributed by same-store sales; 2) significant potential for future store openings, with the brand having a total of 147 directly operated stores worldwide by the end of 24, while YSL and BV have over 300 stores each; 3) in recent years, a differentiated brand mindset has been established, expected to benefit from the industry trend of entry-level consumers shifting away from high luxury. Prada improved quarter-on-quarter in Q3 of 25, looking ahead, the brand is expected to expand its leather goods creativity investment, enhance marketing of icon products such as Galleria, and expand its regenerated nylon series to increase entry-level products, potentially expanding consumer coverage.