For those who want to invest in luxury but are bearish on China (see other comments below), Ferrari may be a good bet as they get only 10% of their revenues from China against 30% generally for luxury brands. They also have a full order book for the next 2-3 years. The valuation is demanding but you still have a 10% discount vs Hermes.
Nice write-up. I like the format of the financial. May ask you where do you get them? I may just add that you see LVMH Arnault with a bit of tinted rose glass. He is really a rider and tried many hostile takeovers (and mostly succeeded). His nickname is something like "the wolf in cachemire", not exactly Warren Buffet....
Could you share where do you get the format of the financial? It is for my personal use and I like it because it is very clean and presumably reasonably accurate
This is an absolutely extraordinary analysis. So well written, and engaging. I agree with the poster below saying that China's likely collapse is going to have a seriously detrimental impact on sales. So much like Apple, I feel bearish on these stocks in the medium term, but long term I can see how healthy that heritage factor is in underpinning their longevity. Love the oigin story of LVMH and the taxi driver comment...just adds to the mythology.
Just found out that a senior membe of CCP admitted that China has excess housing stock that is 200% greater than what is needed, but rather than the chinese population tripling to soak up that excess capacity, they are in demographic decline along with all the debt in the shadow banking system, the complete information vacuum in the Xi government, and all of the problems theyve been slowly storing up for the last few decades. This is going to be the mother of all collapses.
Thinking about LVMH/Hermes as potential shorts - lots of exposure to China, they trade in jurisdictions where the CCP can't screw the short sellers over.
Long-term structurally, sure, they are good businesses, but hard to see them doing well if the Chinese economy has a megacrisis.
Thank you for these analyses.
For those who want to invest in luxury but are bearish on China (see other comments below), Ferrari may be a good bet as they get only 10% of their revenues from China against 30% generally for luxury brands. They also have a full order book for the next 2-3 years. The valuation is demanding but you still have a 10% discount vs Hermes.
I really enjoy reading your writing style
I learned more from this than listening to my luxury analyst for 10 years..
Nice write-up. I like the format of the financial. May ask you where do you get them? I may just add that you see LVMH Arnault with a bit of tinted rose glass. He is really a rider and tried many hostile takeovers (and mostly succeeded). His nickname is something like "the wolf in cachemire", not exactly Warren Buffet....
I make the financial models myself
Nice job
I should clarify - the numbers from the “financials” section are from a site called quickfs.net. The models in the “valuation” section I build myself
thanks for our clarification. Appreciate. keep up with the good work Best Stefano
Could you share where do you get the format of the financial? It is for my personal use and I like it because it is very clean and presumably reasonably accurate
Wow, what an in-depth guide. Amazing effort.
This is an absolutely extraordinary analysis. So well written, and engaging. I agree with the poster below saying that China's likely collapse is going to have a seriously detrimental impact on sales. So much like Apple, I feel bearish on these stocks in the medium term, but long term I can see how healthy that heritage factor is in underpinning their longevity. Love the oigin story of LVMH and the taxi driver comment...just adds to the mythology.
Just found out that a senior membe of CCP admitted that China has excess housing stock that is 200% greater than what is needed, but rather than the chinese population tripling to soak up that excess capacity, they are in demographic decline along with all the debt in the shadow banking system, the complete information vacuum in the Xi government, and all of the problems theyve been slowly storing up for the last few decades. This is going to be the mother of all collapses.
I'm currently seriously bearish on China - https://sergey.substack.com/p/china-so-over-much-crisis
Thinking about LVMH/Hermes as potential shorts - lots of exposure to China, they trade in jurisdictions where the CCP can't screw the short sellers over.
Long-term structurally, sure, they are good businesses, but hard to see them doing well if the Chinese economy has a megacrisis.
What’s your take on LVMH-backed investment funds? That could, theoretically, increase the value of the share vs. other brands, no?