UPDATE: Vipshop Holdings (VIPS) PT Lowered to $13.80 at BofA Securities for 3 Reasons

BofA Securities analyst Joyce Ju lowered the price target on Vipshop Holdings (NYSE: VIPS) to $13.80 (from $17.00) for 3 reasons:

1) Weak demand. Despite a slight pick-up in apparel consumption in January due to cold weather, sales trend so far remained weak for the rest of 1Q.

2) Uncertain 2022. High uncertainty on 2022 outlook due to weak consumer sentiment and macro condition.

3) Buyback suspended. Co. suspended its US$500m share buyback plan since 2H21 due to weak business trend.

The analyst reiterated a Buy rating, stating "Into FY22, co. expects soft consumer sentiment to persist in 1H and looks to maintain steady and healthy operations amid the challenging macro. Mgmt. guides 0-5% YoY decline in revs for 1Q22 and mid-single-digit % non-GAAP net profitability for the full year. In light of the soft growth outlook and recent Covid lockdowns in certain cities, we revise 22-23E revs down by 11-16%, and model 0% and 4% YoY growth respectively. Lower non-GAAP net profit by 26-29% on reduced revs and lack of NT margin expansion. We adjust DCF-based PO to US$13.8 (from US$17.0, discount rate 11% vs 12%)".

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