Blackmores shares set to Flyl, page-3

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Blackmores rated new Outperform – Credit Suisse

about 4 hours ago | 9:13am | DAVID ROGERS
Blackmores has been given an Outperform rating and $175 target price by Credit Suisse after it initiated coverage on the vitamin maker today.
It notes that as a leading Australian supplier of vitamins and dietary supplements, Blackmores is ideally positioned grow in China – the second largest VDS market.
“Blackmores’ China sales could double by FY20 fueling 16% EPS CAGR FY16–FY20,” the broker says. “China sales could surpass A$580mn accounting for 50% of the group.
“Granted, the widely discussed ‘Positive List’ rule restricts export volume via the crossborder e-commerce channel, but, 70% of Blackmores’ volume travels via the daigou channel – e.g. Australia-based selling agents using China personal post. Channel checks reveal daigou has been less affected.”
The broker concludes Blackmores is an attractive investment opportunity with 16% EPS CAGR to FY20 and a 60% ROE – highest among ASX200 and global peers, and at 17x FY18E EPS, Blackmores is also trading below China VDS peers.
Its target price implies a re-rating to 19x FY19 PE, and it notes that there are 30 ASX200 industrials on a higher PE with less growth and lower returns.