Li & Fung's FVE Decreased to HKD 3.64 With Negative Moat Trend as We Transfer Coverage
We transfer coverage of Li & Fung, retaining our no-moat rating, but changing our moat trend to negative from stable. We cut our fair value estimate to HKD 3.64 from HKD 4.83 on lower projected free cash flow that is discounted at a higher rate of 8.9%, up from 8.3% previously, to reflect greater systematic risk. We believe Li & Fung is fairly valued at the current share price level.ÂOur earnings forecast is well below Capital IQ market consensus by around 21% and 28% in 2017 and 2018,...
Li & Fung is an investment holding company. Through its subsidiaries, Co. is a consumer goods design, development, sourcing and logistics company for retailers and brands around the world. Co. is engaged in managing supply chains of high-volume, time-sensitive goods. Co. operates under two business networks, namely the Trading Network and the Logistics Network. The Trading Network focuses on provision of the global sourcing services via multiple channels, such as buying agent, trading-as-principal for private label merchandise and on-shore wholesale business. The Logistics Network focuses on provision of logistics solutions and freight forwarding services.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
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