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The Milan-based luxury-goods company has prepared its listing for many years, however it finally abandoned its born place and chose Hong Kong as its initial public offering market. From this case we can clearly find out that the world is putting Asia in a more important place especially China. According to a report published by CLSA this year, China's demand for luxury goods last year was 15% of the total world's retail revenue, and that number will be 44% in 2020. Because of the continuous growing of Chinese's incomes, China may pass Japan in 3 years to become the second largest luxury-goods consuming country, then become No.1 in 2020.
There are at least two benefits for Prada SpA listing in Hong Kong. First, the high valuation," The maker of Church’s shoes has forecast first-half profit growth of at least 46 percent as it opens more stores in Asia", the investors in China has watched the long waiting line before the high-end goods stores and they fully understand the growing market story here. Second, the raising of its prestige, Prada and other luxury goods company's listing in Asia could be the free advertisements, which will help them to boost their sales.
Compared with the recent falling of the Chinese companies listed in the U.S., Prada's choice is quite right and its stock price won't fall in these years because the company's properties and the intention for its listing is totally different.
OK