Group 1 - The core viewpoint of the report is that Cathay Securities maintains an "overweight" rating on Prada, expecting steady growth in retail sales and net profit in the coming years, with specific profit projections for 2025-2027 [1][2] - For 2025, the company is projected to achieve a net profit of €8.8 billion, with year-on-year growth rates of 5.2%, 8.7%, and 9.0% for the subsequent years [1] - The report anticipates a retail sales growth of approximately high single digits for the entire year of 2025, with a slight slowdown in Q4 compared to Q3 [1][3] Group 2 - Miu Miu is expected to expand its retail space by 10%-15% in 2026, focusing on the Eurasian region and planning to enter the low-penetration U.S. market by 2027 [2] - The acquisition of Versace is expected to contribute new revenue streams, with Versace's revenue at approximately €705 million and an operating loss of €46 million as of March 2025 [2] - The luxury goods industry is transitioning to a "new normal," characterized by a concentration of market share among strong brand DNA companies, with a shift from overt consumption to authenticity and value-driven purchasing [3] Group 3 - Miu Miu's growth potential is supported by high-quality growth, significant store opening potential, and a differentiated brand perception that appeals to entry-level consumers [4] - Prada's Q3 performance showed improvement, with future strategies focusing on enhancing product creativity and expanding entry-level offerings through innovative marketing [4]

Investment Rating - The investment rating for the company is "Buy" [7] Core Insights - The company is expected to maintain stable performance despite high base effects, with currency fluctuations potentially causing short-term profit disturbances. The expansion of Miu Miu and the consolidation of Versace are anticipated to contribute new revenue streams in 2026. The overall customer base remains robust as the industry transitions into a new normal [2][11]. Financial Summary - Total revenue projections (in million euros) are as follows: - 2024A: 5,432 - 2025E: 5,716 (+5.2%) - 2026E: 6,162 (+7.8%) - 2027E: 6,640 (+7.8%) [4] - Gross profit estimates (in million euros): - 2024A: 4,337 - 2025E: 4,573 - 2026E: 4,935 - 2027E: 5,325 [4] - Net profit attributable to shareholders (in million euros): - 2024A: 839 - 2025E: 882 (+5.2%) - 2026E: 959 (+8.7%) - 2027E: 1,046 (+9.0%) [4] Market Outlook - The company is expected to achieve a retail sales growth of approximately high single digits in 2025, leading the industry. The retail growth rate for Q4 2025 is projected to be in the mid-single digits, slightly slowing from Q3. Miu Miu's retail growth rate for Q4 2025 is expected to be between 15-20% [11]. - The company plans to expand Miu Miu's retail space by 10%-15%, focusing on the Eurasian region and further penetrating the U.S. market by 2027. Prada aims to balance its strategic price points while enhancing its product offerings to attract both mass and high-net-worth customers [11]. Valuation Metrics - The company is projected to have a Price-to-Earnings (PE) ratio of: - 2025E: 20X - 2026E: 14.88 - 2027E: 13.65 [11] - The Price-to-Book (PB) ratio is expected to decrease from 3.24 in 2024A to 2.42 in 2027E [4].

Investment Rating - The investment rating for the company is "Buy" [7] Core Insights - The company has shown steady performance despite high base effects, with currency fluctuations potentially causing short-term profit disturbances. The expansion of Miu Miu continues in 2026, and the consolidation of Versace will contribute new revenue streams. The overall customer base remains stable, and the industry is entering a new normal [2][11]. Financial Summary - Total revenue is projected to reach €5,432 million in 2024, with a growth rate of 14.9%. By 2027, revenue is expected to increase to €6,640 million, maintaining a growth rate of 7.8% [4]. - Gross profit is forecasted to be €4,337 million in 2024, increasing to €5,325 million by 2027, with a consistent gross margin around 80% [4][15]. - Net profit attributable to shareholders is expected to grow from €839 million in 2024 to €1,046 million in 2027, reflecting a growth rate of 25.0% in 2024 and around 9.0% in 2027 [4][15]. Market Outlook - The company anticipates a retail sales growth of approximately high single digits for the full year 2025 at constant exchange rates, leading the industry. The retail growth for Q4 2025 is expected to be in the mid-single digits, slightly slowing from Q3 [11]. - Miu Miu is projected to contribute an additional 10%-15% in retail space, focusing on the Eurasian region, with plans to expand into the low-penetration U.S. market by 2027 [11]. - The luxury goods industry is shifting from rapid growth to a "new normal," characterized by market share consolidation among strong brand DNA companies [11].

Core Viewpoint - Prada's retail sales for Q3 2025 met market expectations, showing a year-on-year growth of 7.6% at constant exchange rates, with the Prada and Miu Miu brands performing in line with expectations [1] Sales Performance - Prada's retail sales decreased by 0.8% year-on-year, while Miu Miu's sales increased by 29% year-on-year [1] - Over a two-year period, both brands demonstrated stable quarterly performance, with Prada's core brand showing a year-on-year growth of 1% in both Q2 and Q3 of this year, and Miu Miu showing significant growth of 136% and 134% respectively [1] Market Insights - The Chinese market for Prada's core brand is still experiencing negative growth, but there has been a quarter-on-quarter improvement in Q3 [1] - Positive growth was observed in the Americas, Europe, and Japan, driven by strong local demand and slightly improved tourism demand [1] - Management believes that the worst period in China has passed, and sales have continued to improve since October [1] Future Outlook - The management cautioned that the fourth quarter will be challenging due to tough comparisons, and the last six weeks of the year will be crucial for performance [1]

Group 1 - Morgan Stanley reported that Prada's sales in Q3 increased by 8.5% at constant exchange rates, slightly above market consensus, with retail sales growth of 7.6% aligning with expectations, driven primarily by the volatile wholesale channel [1] - Prada remains one of the fastest-growing groups, with growth rates nearly comparable to Hermès, significantly outpacing French luxury giants LVMH and Kering [1] - Morgan Stanley has lowered its earnings per share forecast for Prada for FY2025-2026 by 0.6% but maintains a target price of HKD 53, while keeping a "market perform" rating due to observed investment opportunities in the luxury sector [1] Group 2 - Market reaction to Prada's results is expected to be muted, as the company's revenue barely meets market expectations, leading to a forecast of price range fluctuations in the coming days or months [1] - Three main concerns are highlighted: increased competition in the creative field with the influx of new creative directors, potential loss of Miu Miu's competitive edge as a brand that has innovated and provided differentiated products [1] - A shift in fashion trends from minimalism to maximalism may disadvantage both Prada and Miu Miu, as more elaborate brands like Gucci gain popularity [1] Group 3 - The acquisition of Versace is projected to dilute the group's profit margins for at least the next few years, with estimated operating losses of EUR 150 million in FY2026 and EUR 120 million in FY2027, indicating minimal profit growth for the group [2] - Morgan Stanley has revised its revenue growth forecast for the group in 2025 down to 6.6% from an original 8.5%, while maintaining an EBITDA margin of 23.4% [2] - By brand, Prada's revenue is expected to decline by 1.3% year-on-year in Q4, while Miu Miu's revenue growth forecast is slightly adjusted down to 30% [2]

Core Viewpoint - Prada's stock opened over 3% higher following the release of its financial results, indicating positive market sentiment towards the company's performance [1] Financial Performance - For the nine months ending September 30, 2025, Prada Group reported a net revenue of €4.07 billion, representing a 9% year-over-year increase at constant exchange rates [1] - Retail sales net revenue also increased by 9% year-over-year at constant exchange rates [1] - Prada's retail sales net revenue decreased by 2% year-over-year at constant exchange rates, while Miu Miu's retail sales net revenue surged by 41% [1] Regional Performance - All regions reported growth in retail sales net revenue at constant exchange rates compared to the same period in 2024: - Middle East: +21% - Americas: +15% - Asia-Pacific: +10% - Europe: +6% - Japan: +3% [1]