CCC confirmed at BUY, TP PLN 60 - The third quarter holds the key
Although the preliminary Q2 EBITDA margin of the group contracted by 1.7%p yoy driven by Modivo and HalfPrice investment, we note the green shoots of operational improvement with the EBITDA margin of the CCC segment at ca. 15% according to our estimatesPerformance in Q3 should determine whether bank covenants will be breached or not
We view the share price as relatively attractive even after applying a 10% discount in our fair value calculations for uncertainty related to the potential need for fresh equity capital
We expect a significant rerating of the share price once more concrete operational progress is delivered
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.
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