SEHK:1913

Stock Analysis Report

Executive Summary

Prada S.p.A., together with its subsidiaries, designs, produces, sells, and distributes leather goods, handbags, footwear, apparel, and accessories in Europe, the Americas, the Asia Pacific, Japan, the Middle East, and Africa.

Rewards

Earnings grew by 14.9% over the past year

Risk Analysis

No risks detected for 1913 from our risk checks.


Snowflake Analysis

Proven track record with adequate balance sheet.


Similar Companies

Share Price & News

How has Prada's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1913 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.1%

1913

1.4%

HK Luxury

1.6%

HK Market


1 Year Return

21.9%

1913

27.3%

HK Luxury

6.0%

HK Market

Return vs Industry: 1913 underperformed the Hong Kong Luxury industry which returned 28% over the past year.

Return vs Market: 1913 exceeded the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

1913IndustryMarket
7 Day4.1%1.4%1.6%
30 Day-3.2%4.5%4.4%
90 Day23.7%6.2%8.6%
1 Year24.7%21.9%31.6%27.3%9.9%6.0%
3 Year2.0%-5.2%52.9%34.9%27.7%14.7%
5 Year-18.4%-28.4%68.9%35.6%21.7%1.4%

Price Volatility Vs. Market

How volatile is Prada's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Prada undervalued compared to its fair value and its price relative to the market?

35.33x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 1913 (HK$28.5) is trading above our estimate of fair value (HK$10.35)

Significantly Below Fair Value: 1913 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 1913 is poor value based on its PE Ratio (33.1x) compared to the Luxury industry average (9.1x).

PE vs Market: 1913 is poor value based on its PE Ratio (33.1x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: 1913 is poor value based on its PEG Ratio (44.6x)


Price to Book Ratio

PB vs Industry: 1913 is overvalued based on its PB Ratio (2.9x) compared to the HK Luxury industry average (0.9x).


Next Steps

Future Growth

How is Prada forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

1.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1913's forecast earnings growth (1.4% per year) is below the savings rate (1.6%).

Earnings vs Market: 1913's earnings (0.7% per year) are forecast to grow slower than the Hong Kong market (11.3% per year).

High Growth Earnings: 1913's earnings are forecast to grow, but not significantly.

Revenue vs Market: 1913's revenue (4.6% per year) is forecast to grow slower than the Hong Kong market (10.2% per year).

High Growth Revenue: 1913's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1913's Return on Equity is forecast to be low in 3 years time (10.6%).


Next Steps

Past Performance

How has Prada performed over the past 5 years?

-17.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1913 has high quality earnings.

Growing Profit Margin: 1913's current net profit margins (8%) are higher than last year (7.2%).


Past Earnings Growth Analysis

Earnings Trend: 1913's earnings have declined by -17.8% per year over the past 5 years.

Accelerating Growth: 1913's earnings growth over the past year (14.9%) exceeds its 5-year average (-17.8% per year).

Earnings vs Industry: 1913 earnings growth over the past year (14.9%) exceeded the Luxury industry -2.8%.


Return on Equity

High ROE: 1913's Return on Equity (8.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Prada's financial position?


Financial Position Analysis

Short Term Liabilities: 1913's short term assets (€1.6B) exceed its short term liabilities (€1.2B).

Long Term Liabilities: 1913's short term assets (€1.6B) do not cover its long term liabilities (€2.8B).


Debt to Equity History and Analysis

Debt Level: 1913's debt to equity ratio (28.6%) is considered satisfactory.

Reducing Debt: 1913's debt to equity ratio has increased from 16.7% to 28.6% over the past 5 years.

Debt Coverage: 1913's debt is well covered by operating cash flow (65.8%).

Interest Coverage: 1913's interest payments on its debt are well covered by EBIT (12.6x coverage).


Balance Sheet

Inventory Level: 1913 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1913's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

What is Prada's current dividend yield, its reliability and sustainability?

1.71%

Current Dividend Yield


Dividend Yield vs Market

company1.7%marketbottom25%2.2%markettop25%6.0%industryaverage2.5%forecastin3Years2.2%

Current dividend yield vs market & industry

Notable Dividend: 1913's dividend (1.82%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 1913's dividend (1.82%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: 1913 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 1913's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (60.3%), 1913's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1913's dividends in 3 years are forecast to be covered by earnings (81.7% payout ratio).


Next Steps

Management

What is the CEO of Prada's salary, the management and board of directors tenure and is there insider trading?

7.0yrs

Average management tenure


CEO

Patrizio Bertelli (73yo)

7.6yrs

Tenure

€12,405,000

Compensation

Mr. Patrizio Bertelli serves as the Chief Executive Officer at Prada S.p.A since June 7, 2012. He is Co-Founder at Prada Holding B.V. He serves as an Executive Director since November 20, 2003 and Director ...


CEO Compensation Analysis

Compensation vs Market: Patrizio's total compensation ($USD13.80M) is above average for companies of similar size in the Hong Kong market ($USD1.00M).

Compensation vs Earnings: Patrizio's compensation has been consistent with company performance over the past year.


Management Age and Tenure

7.0yrs

Average Tenure

56yo

Average Age

Experienced Management: 1913's management team is seasoned and experienced (7 years average tenure).


Board Age and Tenure

8.7yrs

Average Tenure

71.5yo

Average Age

Experienced Board: 1913's board of directors are considered experienced (8.7 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyHK$128,56114 Feb 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares4,585
Max PriceHK$28.04
BuyHK$37,438,73705 Feb 19
OppenheimerFunds, Inc.
EntityCompany
Shares1,447,400
Max PriceHK$25.87

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Ying-Kwai Yuen (53yo)

    Joint Company Secretary

    • Tenure: 8.7yrs
  • Patrizio Bertelli (73yo)

    CEO & Executive Director

    • Tenure: 7.6yrs
    • Compensation: €12.41m
  • Carlo Mazzi (73yo)

    Chairman

    • Tenure: 5.9yrs
    • Compensation: €1.12m
  • Miuccia Prada Bianchi (71yo)

    CEO, President & Executive Director

    • Tenure: 16.2yrs
    • Compensation: €12.41m
  • Anthony Romano (52yo)

    Church Group Chief Executive Officer

    • Tenure: 3yrs
  • Alessandra Cozzani (56yo)

    CFO, Investor Relations Director & Executive Director

    • Tenure: 6.1yrs
    • Compensation: €659.00k
  • Patrizia Albano (66yo)

    Group Corporate Affairs Director & Joint Company Secretary

    • Armando Tolomelli (53yo)

      Asia Pacific Regional Director

      • Tenure: 14.5yrs
    • Stefano Rastrelli (56yo)

      Group Human Resources Director

      • Tenure: 7yrs
    • Lorenzo Bertelli (31yo)

      Head of Group Marketing & Communication


      Board Members

      • Gian Franco Mattei (73yo)

        Independent Non Executive Director

        • Tenure: 10.7yrs
        • Compensation: €153.00k
      • Patrizio Bertelli (73yo)

        CEO & Executive Director

        • Tenure: 7.6yrs
        • Compensation: €12.41m
      • Maurizio Cereda (55yo)

        Independent Non-Executive Director

        • Tenure: 3.7yrs
        • Compensation: €73.00k
      • Carlo Mazzi (73yo)

        Chairman

        • Tenure: 5.9yrs
        • Compensation: €1.12m
      • Miuccia Prada Bianchi (71yo)

        CEO, President & Executive Director

        • Tenure: 16.2yrs
        • Compensation: €12.41m
      • Antonino Parisi

        Chairman of Board of Statutory Auditors

        • JP Liu (63yo)

          Independent Non-Executive Director

          • Tenure: 8.7yrs
          • Compensation: €67.00k
        • Alessandra Cozzani (56yo)

          CFO, Investor Relations Director & Executive Director

          • Tenure: 6.1yrs
          • Compensation: €659.00k
        • Giancarlo Forestieri (72yo)

          Independent Non-Executive Director

          • Tenure: 12.7yrs
          • Compensation: €65.00k
        • David Terracina

          Standing Member of Board of Statutory Auditors

          • Tenure: 7.7yrs

        Company Information

        Prada S.p.A.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Prada S.p.A.
        • Ticker: 1913
        • Exchange: SEHK
        • Founded: 1913
        • Industry: Apparel, Accessories and Luxury Goods
        • Sector: Consumer Durables
        • Market Cap: HK$73.694b
        • Shares outstanding: 2.56b
        • Website: https://www.pradagroup.com/en.html

        Number of Employees


        Location

        • Prada S.p.A.
        • Via Antonio Fogazzaro, 28
        • Milan
        • Milan
        • 20135
        • Italy

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        1913SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJun 2011
        PRDS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2011
        PRPDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2011
        PRPSWX (SIX Swiss Exchange)YesOrdinary SharesCHCHFJun 2011
        PRDS.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDAug 2011

        Biography

        Prada S.p.A., together with its subsidiaries, designs, produces, sells, and distributes leather goods, handbags, footwear, apparel, and accessories in Europe, the Americas, the Asia Pacific, Japan, the Middle East, and Africa. The company offers its products under the Prada, Miu Miu, Church's, Car Shoe, and Pasticceria Marchesi brands. It also provides eyewear and fragrances under licensing agreements. As of December 31, 2018, it had 634 directly operated stores in approximately 70 countries worldwide. The company also sells its products through a network of luxury department stores, independent retailers, franchise stores, and online retailers. In addition, it is involved in the food and beverage, and real estate businesses; and operation of duty-free stores. The company was founded in 1913 and is headquartered in Milan, Italy. Prada S.p.A. is a subsidiary of Prada Holding S.p.A. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/20 13:01
        End of Day Share Price2020/01/20 00:00
        Earnings2019/06/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.