CCC: CCC really goes for more
We maintain our BUY on CCC and lift our FV to PLN 282.1 (from PLN 263.7) thanks to implementation of WC management, M&As (KVAG, Shoe Express, Adler, DeeZee) and an upgraded eobuwie.pl LT outlook. On top of this, given that eobuwie.pl generates ca. 20% of total revs and ca. 23% of EBIT in 2018E, we have decided to change our valuation method to a SOTP with both DCF and peers which overall positively impacted the valuation. Europe has been experiencing the hottest and driest Summer-Autumn for many decades and this negatively impacts CCC’s monthly sales figures as the footwear business is more exposed to weather conditions than clothing. However, we would not panic as bad weather hits all footwear players and some smaller market players may fall away while the biggest like CCC, Deichmann should only be bruised. When the dust settles, they will likely be first to grab any available market share. CCC seems to have enough arguments to go for more market share in the European footwear market by developing its current traditional and ecommerce operations, expanding its product portfolio to new target groups and optimizing its balance sheet and processes to adapt more to the changing footwear/retail environment. The introduction of esize.me technology and a new store format by eobuwie.pl seem quite revolutionary among the European ecommerce retailers.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.
Haitong is the first international Chinese investment bank and our goal is to be the primary channel for capital flows into and out of China. During 2015 the Senior Management Team in London was expanded significantly to focus on this objective and to provide a full-service cross-asset markets business coupled with sector-focused investment banking. We work closely with our world-wide network of offices to bring a true depth of understanding to all client situations.
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