Samsonite Emerging From the Pandemic as a More Profitable Business; Shares Undervalued

Narrow-moat Samsonite's fourth-quarter earnings reinforce our view that the firm will emerge from the pandemic as a more profitable business than ever before. As the effects of COVID-19 on everyday life moderate, demand for travel would only increase, translating to growing sales of Samsonite's luggage. The group has little exposure to Russia and Ukraine, with the two regions contributing just 2% of revenue. Demand in the rest of Europe has not been impacted by the war in Ukraine. Samsonite's shares remain attractive, trading at 16 times 2022 earnings and 12 times 2023 earnings. We maintain our fair value estimate at HKD 22.10, a valuation that implies a 38% upside in share price.