CCC: Shaq attaq (stays BUY)
We maintain our BUY rating on CCC, raising our 12M price target (PT) to PLN 227, from PLN 81. In our view, the >180% ytd share price rebound has not yet fully reflected the upside potential related to the disruption CCC is causing to the fashion industry, through its evolution into a unique combination of all the distribution channels (bricks & mortar, online and off-price), reinforced by licence agreements allowing it to design, manufacture and distribute products under globally-known brands, which contribute superior gross margins and higher ticket values. By 2026E we expect its gross margin to widen by 530bp. Combined with cost cutting and synergies (opex/sales down 400bp), this should allow it to shift from stagnation to value creation, with the EBIT margin reaching 11% and ROE exceeding 30%. We still find CCC’s current P/Es of 13x for 2025E and 12x for 2026E to be an attractive entry point.CCC is engaged in the wholesale and retail trade of clothing and footwear. Co. offers its products to wide range of consumers, from demanding clientele of trendy boutiques to value-oriented medium segment customers, to less wealthy customers seeking reasonably priced quality footwear. Co. pursues a strategy of brand diversification, which is reflected in its three autonomous distribution channels: a chain of official CCC stores, BOTI footwear shops and QUAZI boutiques. Co. offers more than 2,500 designs of footwear. Co. also owns more than 67 proprietary brand names e.g. Lasocki.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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