Credit Suisse optimistic about the growth prospects of the domestic footwear market

It is understood that the current average per capita consumption of footwear in the Mainland is not high. In 2010, the average person only bought 2 pairs of shoes; if by 2015, each person in the Mainland buys one more pair of leather shoes each year, the consumption of the entire footwear market will be It will increase to 300 billion yuan and the compound annual growth will also reach 15%. In view of this, Credit Suisse is optimistic about the future growth prospects of the footwear market in the Mainland, and it is expected that the consumption of footwear in the Mainland will have an ideal growth.

It is reported that during the period from 2005 to 2009, the annual compound annual growth of average footwear consumption in mainland cities reached 14.8%, which is higher than the compound annual growth rate of 11.3% of the total consumer goods, reflecting that mainland consumers are more willing to spend money on footwear. .

With the increase in income of mainlanders and urbanization, Credit Suisse expects that the growth of mid-to-premium women's shoes will accelerate and is expected to increase by 20%. Therefore, Belle, which accounts for 33% of the mid-to-high-end women's shoes in China, directly benefits.

Credit Suisse expects Belle's footwear retail sales from 2010 to 2015 to record a compound annual growth of 22%. Apart from benefiting from the rapid growth of women's footwear, its men's footwear is also expected to have growth potential in the future. Belle's men's shoes accounted for 2.2% of the mid-to-high-end men's shoe market in the Mainland, and has already entered the second best selling brand in the Mainland.

Credit Suisse pointed out that Belle's possible future mergers and acquisitions and the distribution of special dividends are all catalysts for the stock price rise. In terms of risk factors, the main reason is that market competition is more intense than expected.

Credit Suisse expects the profit attributable to shareholders of Belle in 2010, 2011 and 2012 will increase by 39%, 25% and 20% respectively year-on-year. Credit Suisse gives Belle a target price of 16.9 yuan, which is equivalent to forecasting PE27.8 times in 2011.