Macquarie-Shenzhou International（2313.HK）Share price correction overdone.pdfVIP

HONG KONG Shenzhou International 2313 HK Outperform Price (at 13:33, 13 May 2016 GMT) HK$36.70 Share price correction overdone Valuation HK$ 44.80 Event - PER 12-month target HK$ 44.80  We reiterate Outperform on Shenzhou post the share price correction which Upside/Downside % +22.1 we think is unjustified. The share price is down 10% over the last several days 12-month TSR % +23.9 on concerns of a contagion effect from the earnings miss of Taiwanese Volatility Index Low textiles companies together with weak performance of US department stores. GICS sector We believe there is a need to distinguish between Shenzhou and its peers in Consumer Durables Apparel terms of different client mix and category exposure, where orders from Market cap HK$m 51,343 Shenzhou’s sportswear clients remain robust, as we have highlighted in our Market cap US$m 6,616 note published last week during the Greater China Conference. 30-day avg turnover US$m 14.6 Number shares on issue m 1,399 Impact Investment fundamentals  US department stores commented that active wear has been an Year end 31 Dec 2015A 2016E 2017E 2018E outperformer despite challenging retail environment. Investors we talked Revenue m 12,639 14,229 16,319 18,530 EBIT m 2,987 3,421 4,158 4,577 to are concerned about inve