(Adds comments on other luxury makers)
** Moncler is on HSBC’s luxury “Magic 4” list with LVMH , Hermes and Kering, companies which the broker expects to continue outperforming the sector in H2 2019 and FY 2020 at a slower pace than H1 2019
** “We believe the luxury sector is now a case of LVMH versus the rest of the pack as the market leader has made substantial strides in creating incremental separation that we think is unlikely to reverse,” says the broker
** HSBC upgrades Moncler to “buy” from “hold”, citing an attractive risk/reward profile following a share price correction in August, strong performance and the management’s proven track record on execution
** The broker says the company has remained one of the best sector performers in Q2 due to acceleration of its organic sales growth to 18%, alongside LVMH and Hermes
** For the sector as a whole, HSBC expects mainland China to grow by 14%, weaker sales in Hong Kong to be compensated by growth in the rest of Asia, a possible positive surprise from Japan and Europe to remain the slowest region
** HSBC retains “buy” ratings on LVMH, Richemont, Swatch, Kering, Hugo Boss, Tiffany , Capri, Tapestry, Canada Goose and SMCP
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