CETTIRE LIMITED (CTT)
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18/11/2024

5

Initiation of coverage with Sell

$1.30

10.17%

Citi initiates coverage on Cettire with a Sell, High-Risk rating and a $1.30 target price.

The broker believes the luxury industry has peaked after a multi-year boom and now faces inventory build-ups and "soft" demand, with luxury brands seeking to tighten distribution networks, posing challenges for Cettire in accessing stock.

Citi also anticipates increased competition from the arrival of corporate daigou player Poizon from China with a turnaround in Farfetch and YNAP.

The analyst considers consensus estimates overly optimistic and sets earnings forecasts -15% and -8% below consensus for FY25 and FY26, respectively.

Sell, High risk rated. Target price $1.30,

FORECAST
Citi forecasts a full year FY25 dividend of 0.00 cents and EPS of 3.30 cents.
Citi forecasts a full year FY26 dividend of 0.00 cents and EPS of 6.10 cents.

04/11/2024

3

Hold

$1.38

16.95%

Cettire reported 1Q25 net revenue growth of 22% year-on-year and Petra Capital observes the quarter marks a slowdown compared to previous periods as the company prioritised profitability.

The broker notes delivered margin for the quarter declined to 17%, down from over 20% a year ago, impacted by increased promotional activity.

EBITDA at $2.0m is down significantly from $8.7m in 1Q24 but Petra highlights there's a slight improvement from $1.6m in 4Q24.

Cettire ended the quarter with $66m in net cash, up from $59m last year, and its corporate governance was strengthened with the addition of two independent directors, Petra observes.

Hold rating retained. The price target lifts to $1.38 from $1.15 due to "improved risk parameters".

FORECAST
Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of 5.20 cents.
Petra Capital forecasts a full year FY26 dividend of 0.00 cents and EPS of 7.00 cents.