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Prada SpA (HK:1913)
:1913

Prada SpA (1913) AI Stock Analysis

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HK

Prada SpA

(OTC:1913)

Rating:75Outperform
Price Target:
HK$57.00
▲(16.56%Upside)
Prada SpA's overall stock score reflects strong financial performance and a positive earnings outlook, counterbalanced by mixed technical indicators and market challenges. The company's strategic focus on brand expansion and innovation supports a cautiously optimistic view, though valuation remains neutral.
Positive Factors
Acquisition Strategy
Prada is buying Versace at depressed profitability levels at a slightly lower price than expected, which could be beneficial for the overall acquisition strategy.
Brand Synergy
Versace has distinctive brand aesthetics that are potentially complementary to Prada, enjoys strong brand awareness and should be able to leverage Prada’s industrial, retail and operating expertise to turn the business around.
Market Position
Prada brand is firmly in the market share winners’ camp and enjoys brand equity and credentials across multiple categories that few rivals can match.
Retail Productivity
Retail productivity gains should drive attractive EBIT margin expansion.
Negative Factors
Earnings Risk
A potential acquisition of Versace would be dilutive to group’s margins and would increase the group's earnings risk profile.
Financial Impact of Acquisition
Versace is a turnaround story that adds risk and complexity to a compelling organic growth story, dilutes the Prada Group’s margin/ROIC, and dilutes the group’s sales growth potential.

Prada SpA (1913) vs. iShares MSCI Hong Kong ETF (EWH)

Prada SpA Business Overview & Revenue Model

Company DescriptionPrada S.p.A., together with its subsidiaries, designs, produces, and distributes leather goods, handbags, footwear, apparel, and accessories in Europe, the Americas, the Asia Pacific, Japan, the Middle East, and Africa. It offers its products under the Prada, Miu Miu, Church's, and Car Shoe brands. The company also provides eyewear and fragrances under licensing agreements, as well as operates in the food sector under the Marchesi 1824 brand. As of December 31, 2021, it had 635 directly operated stores. The company also sells its products through a network of approximately 26 franchise operated stores; multi-brand stores; luxury department stores; independent retailers; and online retailers. In addition, it engages in the event management and real estate business, as well as operates duty-free stores. The company was founded in 1913 and is headquartered in Milan, Italy. Prada S.p.A. is a subsidiary of Prada Holding S.p.A.
How the Company Makes MoneyPrada SpA generates revenue primarily through the sale of its luxury products, which include clothing, leather goods, footwear, and accessories. The company's key revenue streams consist of retail sales from its standalone boutiques and department store concessions, as well as wholesale distribution to authorized retailers. Prada also capitalizes on its brand prestige and innovation in design to command premium pricing for its products. Additionally, the company benefits from strategic marketing and collaborations with influential designers and celebrities, which enhance its brand visibility and appeal. The company's earnings are further supported by its global retail network, which spans across major markets in Europe, Asia, and the Americas, allowing it to tap into a diverse and affluent customer base.

Prada SpA Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 2.65%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant revenue growth and brand expansion, particularly with Miu Miu's performance and geographic sales increases. However, market challenges and uncertainties, particularly in China and the US, were notable. Despite these challenges, the overall sentiment remains cautiously optimistic with a focus on strategic growth and innovation.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Prada Group recorded net revenues of €1.34 billion in the first quarter of the year, up 13% at constant FX compared to the same period last year. Retail sales reached €1.22 billion, also up 13% at constant FX.
Miu Miu's Remarkable Growth
Miu Miu brand showed a 60% growth at constant FX, contributing to 31% of group retail sales, up from 22% in fiscal year 2024.
Geographic Sales Performance
Middle East delivered the best performance of the quarter with retail sales up 26%. Other regions also showed growth: Europe up 14%, Americas up 10%, Asia Pacific up 10%, and Japan up 18%.
Innovative Offerings and Expansion
Prada's cultural initiatives, such as the Mi Shang location in Shanghai and Miu Miu Custom Studio, are enhancing brand desirability and customer engagement.
Negative Updates
Market Challenges
The market is facing irregular trends and challenging conditions, with no significant improvement signals in the near term.
Chinese Market Volatility
The Chinese cluster showed volatility, moving from negative to positive in Q4 and back to negative in Q1 against a double-digit positive from Q1 2024.
US Market Uncertainty
The US market remains unstable with weekly variations, affected by a weaker dollar and recent uncertainties.
Comparative Challenges in Japan
Japan's growth is moderating due to a challenging comparison base from previous extraordinary growth driven by local consumption and tourist flows.
Company Guidance
In the Prada Group's first quarter of 2025 revenue update, the company reported net revenues of €1.34 billion, reflecting a 13% increase at constant exchange rates compared to the same period last year. Retail sales reached €1.22 billion, marking a 13% rise at constant FX, driven by like-for-like and full-price sales, while the wholesale segment grew by 7%. Royalties, supported by strong performance in eyewear and fragrances, also contributed 13% growth. By brand, Miu Miu exhibited remarkable growth with a 60% increase at constant FX, raising its retail sales contribution to 31% from 22% in 2024. Geographically, the Middle East led with a 26% rise in retail sales, followed by Japan at 18%, Europe at 14%, and the Americas and Asia Pacific each at 10%. Despite a challenging market environment, Prada maintained a positive trajectory, emphasizing innovation and cultural projects to enhance brand desirability.

Prada SpA Financial Statement Overview

Summary
Prada SpA displays strong financial health with robust revenue and profit growth, healthy profitability margins, and efficient cash flow management. The balance sheet shows moderate leverage, supporting financial stability. Key metrics include a solid revenue growth rate, high gross and net profit margins, and impressive free cash flow growth.
Income Statement
88
Very Positive
Prada SpA has demonstrated strong revenue growth and profitability. The gross profit margin for 2024 is robust at 79.84%, indicating effective cost management. The net profit margin has improved to 15.44%, reflecting enhanced profitability. EBIT and EBITDA margins are healthy at 23.56% and 37.08%, respectively. The revenue growth rate from 2023 to 2024 is 14.91%, showcasing a solid upward trajectory.
Balance Sheet
75
Positive
The balance sheet reflects solid equity and manageable debt levels. The debt-to-equity ratio is 0.63, suggesting prudent leverage. Return on Equity (ROE) is strong at 19.06%, indicating efficient use of shareholders' equity. The equity ratio of 51.45% shows a stable financial structure with significant assets funded by equity.
Cash Flow
82
Very Positive
Prada SpA exhibits strong cash flow generation. The free cash flow growth rate is notable at 201.21%, signifying substantial cash generation capability. The operating cash flow to net income ratio is 1.97, highlighting excellent cash conversion. The free cash flow to net income ratio is impressive at 1.42, indicating strong cash flow relative to profits.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.43B4.73B4.20B3.37B2.42B
Gross Profit4.34B3.80B3.31B2.55B1.74B
EBITDA2.01B1.73B1.42B1.09B648.73M
Net Income838.91M671.03M465.19M294.25M-54.14M
Balance Sheet
Total Assets8.55B7.62B7.38B6.96B6.53B
Cash, Cash Equivalents and Short-Term Investments1.01B689.52M1.09B981.79M448.57M
Total Debt2.79B2.60B2.67B2.79B2.89B
Total Liabilities4.13B3.74B3.88B3.83B3.68B
Stockholders Equity4.40B3.85B3.48B3.11B2.83B
Cash Flow
Free Cash Flow1.19B395.61M882.20M923.90M482.86M
Operating Cash Flow1.65B1.16B1.12B1.14B592.42M
Investing Cash Flow-462.45M-759.19M-250.21M-137.26M-149.91M
Financing Cash Flow-875.47M-775.73M-787.38M-494.73M-395.27M

Prada SpA Technical Analysis

Technical Analysis Sentiment
Negative
Last Price48.90
Price Trends
50DMA
49.27
Negative
100DMA
54.16
Negative
200DMA
54.80
Negative
Market Momentum
MACD
-0.70
Positive
RSI
47.97
Neutral
STOCH
69.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1913, the sentiment is Negative. The current price of 48.9 is below the 20-day moving average (MA) of 49.31, below the 50-day MA of 49.27, and below the 200-day MA of 54.80, indicating a bearish trend. The MACD of -0.70 indicates Positive momentum. The RSI at 47.97 is Neutral, neither overbought nor oversold. The STOCH value of 69.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1913.

Prada SpA Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$125.13B17.5420.60%2.93%14.60%24.66%
61
Neutral
AU$2.79B25.615.01%5.45%2.63%-29.95%
$725.75M6.426.25%9.39%
$16.24B21.4522.73%3.15%
$490.03M12.244.99%0.96%
$1.44B8.279.79%12.46%
66
Neutral
HK$149.11B84.0954.70%0.80%163.00%243.31%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:1913
Prada SpA
48.35
-8.31
-14.67%
CHOWF
Chow Sang Sang Holdings International
0.98
0.12
13.95%
CJEWF
Chow Tai Fook Jewellery Group
1.69
0.67
65.69%
EPRJF
Emperor Watch & Jewellery
0.06
0.04
200.00%
LKFLF
Luk Fook Holdings (International)
2.26
0.23
11.33%
HK:6181
Laopu Gold Co. Ltd. Class H
868.50
792.16
1037.67%

Prada SpA Corporate Events

Prada Reports Strong Revenue Growth in Q1 2025
Apr 30, 2025

Prada S.p.A. announced a 12.5% increase in net revenues for the first quarter of 2025 compared to the same period in 2024, reaching 1,341.3 million Euros at constant exchange rates. Retail net sales rose by 13.0%, with the Miu Miu brand experiencing a significant 60.2% increase. Geographically, the Middle East showed the most substantial growth at 26.5%, followed by Japan at 18.0%. This robust performance highlights Prada’s strong market positioning and growth potential in the luxury fashion sector.

Prada S.p.A. Announces AGM Resolutions and New Auditor Appointment
Apr 30, 2025

Prada S.p.A. announced the successful passing of key resolutions during its Annual General Meeting held on April 30, 2025. The company approved its financial statements showing a net income of €849.7 million for 2024, declared a final dividend of €0.164 per share, and appointed KPMG S.p.A. as its external auditor for the next three years. These decisions reflect Prada’s robust financial health and strategic focus on maintaining transparency and shareholder value.

Prada Updates Final Dividend for 2024
Apr 30, 2025

Prada S.p.A. announced an update to its final dividend for the year ended December 31, 2024, with the dividend amount set at EUR 0.164 per share, equivalent to HKD 1.431802 per share based on the updated exchange rate. The dividend will be paid net of a 26% Italian withholding tax, and shareholders may seek a refund for any excess tax paid. This announcement reflects Prada’s commitment to returning value to its shareholders and may impact the company’s financial positioning and investor relations.

Prada S.p.A. Schedules Board Meeting to Approve Q1 2025 Revenues
Apr 16, 2025

Prada S.p.A. has announced that its Board of Directors will convene on April 30, 2025, to approve the release of the unaudited quarterly revenues for the first quarter of 2025. This meeting is significant as it will provide insights into the company’s financial performance and could impact its market positioning and stakeholder confidence.

Prada SpA Acquires Versace for $1.375 Billion
Apr 10, 2025

Prada SpA has announced a significant acquisition of Versace HoldCo, valued at approximately US$1.375 billion, which will make Versace a subsidiary of Prada. This strategic move is expected to enhance Prada’s market positioning in the luxury fashion sector, potentially increasing its competitive edge and offering new growth opportunities.

Prada S.p.A. Announces Online Annual General Meeting and Key Resolutions
Apr 2, 2025

Prada S.p.A. has announced its Annual General Meeting scheduled for April 30, 2025, which will be conducted online in accordance with Italian legislation. Key resolutions include the approval of the company’s financial statements, a dividend distribution of Euro 419.6 million, and the appointment of KPMG S.p.A. as the external auditor for the next three years. This meeting underscores Prada’s commitment to transparency and governance, potentially impacting shareholder confidence and market perception.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: May 23, 2025