The future of Richemont may be in the hands of young, middle-class Chinese consumers as the luxury retailer seeks to attract millennials to its brands. And it seems that South African investors are willing to pay a premium to gain favour with this growing consumer market. David Lerche, a senior investment analyst at Sanlam Private Wealth, said that at a forward price-to-earnings multiple of 24.5, investors in Richemont shares today were already paying for a number of years of future growth. "This growth is not certain and thus the risk or reward profile of such an investment is not particularly attractive," he said. "The group also trades at an unusually high multiple relative to its peers in the luxury space, which means there are probably better options available." But Lerche added that local investors did not have access to Richemont's peers - such as LVMH, Tiffany and Kering. According to Bloomberg data, Moët Hennessy Louis Vuitton SE, Tiffany and Kering are trading at price-to-...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.