Group 1 - Morgan Stanley reports that the upcoming creative wave poses risks to Prada (01913) as renowned creative directors join competitive brands, making it difficult to see how Prada and Miu Miu can maintain growth momentum [1] - Despite confidence in the group's good management and cheap stock price, there is no clear reason for the group to outperform competitors in the coming months; thus, the target price is slightly reduced from HKD 53 to HKD 51, with a rating of "in line with the market" [1] - The firm anticipates that Prada will be one of the few personal luxury goods groups to report a continued slowdown in total sales and retail sales in Q4, with Miu Miu's growth rate expected to slow significantly, projecting a Q4 year-on-year growth of only 17%, down from 29% in Q3 and 49% in the first half of the year [1] Group 2 - For the Prada brand, Morgan Stanley slightly raises its Q4 organic sales growth (OSG) forecast to flat year-on-year, indicating that the brand's momentum remains robust [2] - For the Miu Miu brand, the Q4 year-on-year growth forecast is downgraded to 17%, indicating a continued slowdown compared to the 28.6% growth in Q3; however, Miu Miu is still expected to maintain strong momentum and performance due to its product appeal [2] - At the group level, Morgan Stanley lowers its growth forecast for Q4 2025 to 4.4% and for the entire year to 7.6%, leading to a reduction in earnings per share forecasts for the next two years by 0.6% and 2.7%, respectively [2]

Core Viewpoint - Morgan Stanley's report indicates that despite optimism regarding Prada's brand fundamentals in Q4, the Prada Group is expected to be one of the few personal luxury goods groups to report a continued slowdown in total and retail sales in Q4 [1] Group Performance - The growth rate of the subsidiary brand Miu Miu is anticipated to slow significantly, with a projected year-on-year growth of only 17% in Q4, compared to 29% in Q3 and 49% in the first half of the year [1] Competitive Risks - The upcoming creative wave poses risks to the group, as renowned creative directors are joining competitive brands, making it difficult for Prada and Miu Miu to maintain growth momentum [1] Management and Valuation - Although the group is believed to be well-managed and its stock is considered cheap, there is no clear reason to expect it to outperform competitors in the coming months [1] - Morgan Stanley has slightly reduced its target price from HKD 53 to HKD 51, maintaining a "market perform" rating [1]