Group 1 - The eighth China International Import Expo (CIIE) is set to open in 30 days, with the first batch of exhibits arriving in Shanghai, showcasing the city's commitment to hosting the event and promoting global trade [1] - Shanghai's "first launch economy" is a significant draw for global brands, with CASETiFY and MUJI planning to debut new products at the expo, highlighting the city's attractive business environment and government support [2][3] - Medtronic will showcase six new products at the expo, marking a strategic shift from exhibitor to investor, emphasizing innovation and collaboration in the Chinese market [3][4] Group 2 - The success of previous CIIEs has bolstered foreign companies' confidence in investing in Shanghai, with 4,223 new foreign-invested enterprises established in the city from January to August, a 3.9% increase year-on-year [4][5] - Henkel plans to expand its exhibition scale at the CIIE, presenting innovations in adhesive technology and consumer brands, while also investing in a new innovation center in Shanghai [5] - Companies like DSM are accelerating their investments in China, with new product launches at the expo reflecting their commitment to the market [5][6] Group 3 - The Shanghai government has established a leadership group to enhance service guarantees for the CIIE, focusing on improving the quality of the event and the overall service level [5][6] - New customs measures have been introduced to facilitate the expo, including support for bonded display and sales, which aims to enhance the event's spillover effects [6] - The introduction of the "CIIE Food Fair" and additional transportation services demonstrates Shanghai's efforts to provide a comprehensive experience for exhibitors and attendees [6]

Group 1: Granolas Sector Analysis - The Granolas sector, which includes major European companies, has underperformed the European market index by approximately 25% since early 2024, with its market capitalization dropping from 27% to 20% of the overall European market [2] - Despite weak stock performance, Granolas' earnings have not deteriorated, with an expected earnings growth rate of 8% for 2025, while overall European market earnings are projected to remain flat [2] - The valuation issues of Granolas have been corrected, with the current price-to-earnings ratio at a 6% discount compared to the median of the past 10 years, indicating a return to reasonable levels [2] - Granolas' free cash flow yield has improved, and cash reserves on the balance sheet increased from €91 billion in 2023 to €106 billion in 2024, with stock buybacks projected to rise from €23 billion in 2023 to an annualized €36 billion in 2025 [2] Group 2: French Stock Market Outlook - The French stock market has underperformed the market by about 15% over the past two years, with bank stocks lagging behind Eurozone peers by as much as 30% [4] - Currently, the French stock market is trading at a significant discount compared to the STOXX 50 index, a situation historically seen only during major crises [4] - Morgan Stanley believes that the long-term bond yields in France are unlikely to continue rising, and the negative impact from the government's failure to pass a confidence vote may temporarily dissipate, presenting attractive investment opportunities [4] - Despite high uncertainty, including potential future confidence votes, there is a possibility of reaching a budget plan acceptable to the market, and any negative impact from re-elections on risk assets may be short-lived [4]

Group 1: FILA's Strategic Moves - FILA has renewed its sponsorship of the China Open and upgraded its status to the exclusive official sportswear sponsor [1] - FILA has signed Chinese tennis player Bu Yunchaokete as its first tennis ambassador in China [1] - The tennis market in China is projected to grow significantly, with an expected market size of 36.75 billion yuan and participation reaching 25.18 million by 2024 [3] Group 2: Market Challenges and Competitor Performance - Nike's revenue in Greater China is expected to decline by 18.7% year-on-year to $3.209 billion (approximately 23 billion yuan) in the second half of fiscal year 2025 [1] - Anta Group's revenue increased by 14.3% to 38.544 billion yuan, but its net profit fell by 8.9% to 7.031 billion yuan [2] - Anta's gross margin has been impacted, decreasing by 0.7 percentage points to 63.4% due to competitive pressures [2] Group 3: FILA's Sales Performance - FILA's sales have shown fluctuations, with a low single-digit year-on-year decline in Q3 2024, while overall revenue grew by 6.1% to 26.6 billion yuan [3][4] - The decline in sales is attributed to weaker performance in trendy and children's segments [3]

Group 1 - European stock markets show a mixed performance, with the pan-European STOXX 600 index rising slightly by 0.2%, but significant sectoral divergence is evident [2] - Defensive sectors like healthcare and luxury goods are performing well, with companies such as UCB and AstraZeneca driving positive sentiment; the luxury goods sector rebounded nearly 2%, indicating a recovery in high-end consumer expectations [2] - Conversely, banking and energy stocks are underperforming, with banks sensitive to overall economic sentiment and energy stocks impacted by a 2% drop in international oil prices [2] Group 2 - Current market sentiment is heavily influenced by uncertainties from the U.S., particularly the potential government shutdown, which could delay the release of key economic data, including the non-farm payroll report [3] - There are two prevailing views in the market regarding the government shutdown: one suggests a bipartisan agreement will be reached, while the other warns of ongoing risks that could lead to decision-making in an "information vacuum" for the Federal Reserve [3] - Investors are advised to focus on bottom-up stock selection during periods of macro data absence, as individual stocks or sectors can still show positive performance despite overall uncertainty [3]

Core Viewpoint - UBS reports that despite a downturn in the industry, Prada's profitability remains solid, but its stock price has been under pressure this year due to weak investor sentiment. UBS believes the market has underestimated Prada's growth potential starting in 2026 and maintains a "Buy" rating [1] Valuation Summary - UBS values Prada based on the luxury goods industry's current price-to-earnings ratio of approximately 23 times the 12-month forward earnings, arriving at a fair value of HKD 83. Discounted cash flow valuation yields a fair value of HKD 65. The average of these two valuations sets a target price for Prada at HKD 74, down from a previous target of HKD 77 [1] Sales Forecast Summary - Prada is expected to report third-quarter sales on October 23, predicting group sales of EUR 1.3 billion, representing a 6% growth at constant exchange rates. By channel, direct store sales are anticipated to be EUR 1.182 billion, growing 7% at constant exchange rates, while wholesale sales are expected to reach EUR 86 million, growing 2% [1] Brand and Regional Performance - By brand, Prada is forecasted to decline by 2%, while Miu Miu is expected to grow by 28%. Regionally, the Americas are projected to lead growth at 14%, followed by the Middle East at 12%, Asia-Pacific at 6%, Europe at 5%, and Japan at a decline of 3% [1]

Lakehouse Capital, a Sydney-based investment manager, released its “Lakehouse Global Growth Fund” annual investor letter. A copy of the letter can be downloaded here. The year was strong for the fund despite volatility, backed by the new US administration. The fund returned 33.4% net of fees and expenses compared to 18.4% for its benchmark. Since its inception in December 2017, the Fund has returned 254.4% compared to 139.9% for its benchmark, the MSCI All Country World Index, Net Total Returns (AUD). In ad ...

Group 1: Major Corporate Changes - L'Oréal announced significant adjustments to its executive committee, with new appointments set to take effect in January 2026, aiming to enhance its strategic focus in the U.S. market [2] - Estée Lauder is undergoing a substantial salary reduction for its executive team, with a total annual compensation decrease of 28% for FY2025, reflecting a collective compromise amid poor performance and declining stock prices [3] - Burberry's global procurement and marketing director has left the company, indicating challenges in retaining key executives during its transformation strategy [11] Group 2: Market Performance and Reactions - H&M reported better-than-expected Q3 results for FY2025, with net sales increasing by 2% year-on-year, leading to a 10% surge in stock price [6][5] - Brunello Cucinelli's stock plummeted by 15% following allegations of regulatory violations in the Russian market, highlighting the fragility of luxury brand valuations [7] - LVMH continues to expand its media asset portfolio, indicating a strategic move to enhance its influence in the media landscape [9] Group 3: Strategic Developments - Ralph Lauren secured a significant legal victory in China, confirming its "POLO" trademark as a well-known brand, which strengthens its position in the market [4] - LVMH's Kendo has sold its beauty brand KVD Beauty to Windsong Global, marking its first brand sale and a shift in strategy to streamline its offerings [9] - Reports suggest that L'Oréal is primarily interested in retaining only the profitable beauty business of Armani, with a licensing agreement extended until 2050 [13]

Core Insights - The luxury goods market in China, which experienced rapid growth a decade ago, is now facing a downturn, with significant declines in revenue and profit reported by major brands like LVMH [3][4][5] - In contrast, the market for near-expiry food products is witnessing explosive growth, with a projected market size exceeding 40 billion yuan and an annual growth rate of nearly 6% [4][10] Group 1: Luxury Goods Market Decline - In 2015, China's luxury goods market reached a peak size of 113 billion yuan, contributing significantly to global consumption [1] - By 2025, LVMH reported a 4% decline in revenue for Q2, with a 15% drop in operating profit and a 22% drop in net profit [3] - Bain & Company revised its forecast for the global luxury goods market, predicting a potential decline of 2% to 5% in sales for 2025 [3] Group 2: Rise of Near-Expiry Food Products - The near-expiry food market in China is projected to surpass 40 billion yuan this year, driven by a shift in consumer attitudes towards more practical and cost-effective purchasing [4][10] - The rapid expansion of near-expiry food chains, such as Haotemai, reflects a growing consumer preference for value-oriented shopping [4] - The trend indicates a fundamental change in consumer behavior from ostentatious luxury spending to rational and pragmatic consumption [4][10] Group 3: Changing Consumer Psychology - The shift in consumer behavior is attributed to a deep transformation in the consumption psychology of the middle class, moving from conspicuous consumption to practical spending [5][10] - The middle class's debt levels have risen above 50%, with a focus on cost-effectiveness and practical consumption dominating their purchasing decisions [5] - The economic environment has shifted from rapid growth to a more cautious approach, influencing consumer habits and preferences [7] Group 4: Generational Shift in Consumption - The primary consumers of luxury goods have shifted from the older generations (70s and 80s) to Generation Z, who prioritize cultural identity and self-expression over brand logos [8] - By 2025, online penetration of luxury goods is expected to reach 46%, with Generation Z accounting for 72% of transactions [8] - The second-hand luxury market is projected to grow significantly, indicating a shift towards circular consumption and away from new luxury purchases [8] Group 5: Future Trends in Consumption - The rise of near-expiry food signifies a new trend in middle-class consumption, emphasizing quality-price ratio and sustainable practices [10][11] - Future consumption patterns are expected to focus on experiential spending, with increased interest in high-end travel and cultural entertainment [10] - Companies are encouraged to adapt to the "new pragmatism" in consumer behavior, focusing on quality and value in their offerings [11]

Core Insights - The luxury goods discount market is experiencing a surge in popularity, particularly during the National Day and Mid-Autumn Festival holidays, as consumers seek more affordable options while maintaining a sense of quality [1][3] - E-commerce platforms are actively promoting luxury goods sales, with significant discounts attracting consumers who previously preferred purchasing from brand boutiques [1][3] Group 1: Consumer Behavior - Consumers are increasingly shifting towards purchasing discounted luxury items, with many opting for sales over traditional retail, leading to substantial savings [3] - The perception of luxury is evolving, with consumers now prioritizing value for money rather than simply associating high prices with quality [3] Group 2: Market Trends - The luxury discount sales phenomenon has become a notable trend in the consumer market this year, with limited-time offers and steep price reductions drawing significant attention [3] - Major brands like Burberry, Coach, and Tory Burch have seen rapid sales growth since mid-September, indicating a strong demand for discounted luxury products [1][3]

Core Viewpoint - The fashion industry is increasingly venturing into the beauty sector as a response to declining sales, with several major brands launching beauty products to explore new growth opportunities [3][10][46]. Group 1: Fashion Brands Entering Beauty - In September 2025, major fashion brands like Gap, Zara, and H&M announced significant moves into the beauty industry, indicating a trend among fashion companies to diversify their product offerings [5][16]. - Gap Group plans to launch beauty products in 150 Old Navy stores, with some featuring beauty consultants, aiming to leverage its financial stability for growth [12][10]. - Zara has introduced its first hair care line, including shampoo and conditioner, marking its entry into the hair care segment after previously launching cosmetics and fragrances [15][14]. Group 2: Performance of Fashion Brands - Gap Group reported a 4.85% increase in net sales for Q2 2024, ending a three-year decline, but the growth rate has slowed significantly compared to previous years [7][10]. - Zara's parent company, Inditex, experienced a modest 1.6% sales growth in H1 2025, with Zara itself showing the slowest growth in five years at 0.9% [13][14]. - H&M's net sales fell by 1.87% in the same period, with a notable decline in net profit, indicating a downward trend for the brand [16][17]. Group 3: LVMH's Beauty Strategy - LVMH launched its own beauty brand in 2025, with a focus on luxury makeup products, including 55 lipstick shades, aiming to enhance its beauty segment's profitability [32][33]. - Despite the launch, LVMH's overall sales and profits saw significant declines in H1 2025, with a 4.48% drop in net sales and a 21.59% decrease in net profit [34][35]. - The beauty segment's operating profit margin remains lower than the group's average, highlighting challenges in achieving profitability through self-created beauty brands [39][40]. Group 4: Designer Brands and Fragrance - Designer brands are increasingly entering the fragrance market, with several launching new perfume lines in collaboration with established fragrance companies [20][22]. - The trend reflects a broader strategy among fashion brands to transform into lifestyle brands, leveraging their design expertise while outsourcing production and distribution to fragrance giants [22][24]. - Notably, Christian Louboutin's fragrance line, managed by Puig, has faced challenges, with its makeup segment experiencing a decline in sales [30][28]. Group 5: Market Outlook and Challenges - The collective move into beauty by fashion brands raises questions about the sustainability of this strategy amid economic downturns [46]. - The beauty market's appeal remains strong, but the success of these ventures will depend on the brands' ability to adapt and innovate in a competitive landscape [46].