JPMorgan Starts Baozun (BZUN) at Overweight

JPMorgan analyst Andre Chang initiates coverage on Baozun (NASDAQ: BZUN) with a Overweight rating and a price target of $45.00.

The analyst comments "We believe Baozun’s share price has largely reflected the negative impact from some global sportswear brands’ sales in 1H21 due to the China cotton controversy, with consensus EPS cut by over 20% YTD. Investors are now likely to focus on Baozun's long-term growth, which is more visible than for most China ecommerce names, in our view, As the largest brand ecommerce service provider by far in China, Baozun has a competitive advantage in securing growth together with leading brands, whose demand won’t be affected by uncertain market share shifts among major ecommerce platforms due to intensifying competition and regulatory pressure. We project a 30%+ EPS CAGR in 2021-23E as it taps into new brands/categories/channels where online penetration is still low. This growth and the current valuation suggest a forward PEG ratio of 0.7x, vs. peers’ 1x, supporting potential share price upside once Baozun’s growth re-accelerates into 2H21."

For an analyst ratings summary and ratings history on Baozun click here. For more ratings news on Baozun click here.

Shares of Baozun closed at $33.95 yesterday.

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