Member Info for VinnyNg

But share count has declined by 10%+ due to buy back.

On a market cap basis I think it is now lower than the low point of pandemic, lower than even the low point of 2016 China fear.

On a full-price-revenue multiple basis, it is now as low as 08/09 crisis. Full price revenue multiple is now 2x, same as the bottom of Mar 09.

It's just cheap...

What is priced into the stock is only the full-price heritage outerwear and rainwear business, which is a £1bn+ revenue business trading at full price in the flagship stores / online stores. Using European full-price lux co 4x sales multiple (lvmh, prada, moncler) the heritage outerwear and rainwear business already accounts for all the Burberry current market cap.

Daniel Lee's magic and outlet/wholesale/licensing profit are all freebies.

It's probably the cheapest yet with strong business quality right now in the lux space. Bottom of the food chain you got tapestry and capri owning the aspirational base and constantly discounting (even versace is discounting on the website...), top of the food chain you got hermes. Brby dan lee is pushing brby up to the top table but you get this for free - no need for this to play out for the investment to work (i.e. Dan lee doesnt meddle with heritage trench coat which is the only thing being priced into the stock)...

Full-price leather goods and outerwear increased on a lfl basis 50%+ compared to pre COVID - "the rich dont buy this brand" is a bit of a stretch statement, compared to the statistics mgmt gives ...clearly unless they lie.

top client is 12.5% of overall customer base (see interim results presentation). Website completely has no end of season markdown as opposed to previous times.

Look at their instagram posts, some W23 trench and bags are now sold out.

Bottom line, if you ignore all revenue from outlet and wholesale, the stock is trading at 2x ONLY-FULL-PRICE revenue. All full-price lux business are trading above 3.5x sales.

Brby is valued like Michael Kors, Coach. Yet the brand quality is much higher.

Aspirational customers can’t tolerate the pricing points of Dan Lee latest collection - but that’s the whole point. Those are targeted at true lux buyers.

Read through some sell side reports, Brby is so under appreciated some analysts even got their share outstanding wrong. Too busy covering lvmh Hermes kering etc to care about the obviously cheap valuation at Brby.

Full price sales is now at least 75% of retail, up 15% since Riccardo Tisci days.

Even modelling Ceo £4bn revenue target 10 years out you can still get low 20% cagr total return at this valuation.

Premium valuation: does one need a premium valuation for HOTC? Right now at £200m market cap it trades at 10x normalised after tax earning (assuming £220m revenue next year, 12% pre-ifrs ebit margin). One just need it to trade in line with the market at 16x to justify a re-rating gain, let alone revenue/earning expansion

Asset intensity: last 6 yrs store counts went up by 25% with revenue doubling - not fair I think to take a growth period to judge the asset intensity of the business. At the end of the day, if you cap store count they can Jack up pricing and all of that flow to the bottom line. That’s See Candies (Buffett) level of low (!) asset intensity.

Borrowings: are you referring to trade payables? Because clearly q1 24 updates cited a net cash of 8m£ with an undrawn(!) rcf of £20m odd.

Yes - if anything it may be a collaboration. And if such a thing is currently being pursued then it will most likely be when HOTC shoot trough £250m sales (the current maximum revenue that the group can achieve based on 300m chocolate production capacity - assuming pricing stays broadly the same). If Angus T wanted a repeat of the past, i.e. a double in production capacity to say 600m chocs capacity, then he would need outside money. Both debt and equity financing have been done in the past (choc bonds and 2021 equity raise), it's not totally inconceivable that Ale Costa may end up being an equity partner

Hi Tom/Andrew, what do you think about Alexandre Tadeau de Costa (Ale Costa) of Brazil Cacau Show who just bought 3% a month or so ago. I notice that in a paper Ale Costa also mentioned he’s looking for m&a target outside Brazil. Cacau Show has 30x the number of store count as HOTC though lots of it is under franchise rather owned store model like HOTC. But there are a lot of similarities in terms of product positioning, leader in premium chocolate gifting etc.