Title Apparel: Buy Toung Long, Quang Viet
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Title:Apparel: Buy Toung Long, Quang Viet
Download File:Apparel industry note 170718--sinopac.pdf 
Summary:Nike’s stronger-than-expected FY4Q17 results and its announcement of partnering with Amazon energized share prices throughout its supply chain. Similarly, many local apparel makers are seeking ways to cooperate with E-commerce platforms. We also welcome evidence that one year of tight inventory management has digested most of the apparel inventory overhang. On the other hand, US apparel sales remain lackluster and, by our estimate, are unlikely to improve meaningfully until 4Q17. For now, we don’t recommend chasing stocks that have rallied recently. Instead, we recommend Toung Loong Textile (4401 TT) and Quang Viet (4438 TT), eyeing their stronger growth potential in 3Q17.

  • Toung Loong Textile (4401 TT): Maintain Buy, TP of NT$110 (22x 2017F P/E)—a 21.55% upside

  • Quang Viet (4438 TT): Maintain Buy, TP of NT$189 (22x 2017F P/E)—a 12.5% upside, TP raised from 20x
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