[ET Net News Agency, 10 January 2020] Jefferies Research initiated coverage on
L'Occitane International (00973) with a "buy" rating and a target price of HK$21.9.
The research house said L'Occitane has become a company with diversified brands. This
will help achieve its mid-term target of EUR2.5bn sales by FY2024 with OPM (operating
profit margin) in the mid-teens.
After the acquisition of Elemis, L'Occitane/Elemis/Limelife/others will account for
78%/10%/6%/6% of sales respectively in FY2020. Jefferies expects L'Occitane, the core
brand, to achieve MSD LCY (mid-single-digit, in local currency) growth for the next two
years, i.e. in the range of 4-5% in FY2020-22. The key drivers are China and Japan. (KL)