Price Reduction Is The Only Magic Weapon H&M King Return! Share Price Rose 18%, The Biggest Increase In 17 Years.

The expected three quarter sales and privatization hearsay stimulus in the roller compacted Market

On Monday, after a 8.8% high opening, it continued to ignore the management's profit warning and rose to the highest level of SEK 140 in the early days.

As of the three quarter of August 31st, sales of Hennes & Mauritz AB AB increased by 9.1% to 64 billion 800 million kronor compared with the previous year, and sales increased 9% to SEK 55 billion 821 million after tax.

The expected growth and sales were 5% and SEK 54 billion respectively.

Growth is mainly driven by a gradual improvement in sales and multiple market share. The Swedish kronor's weakness is also conducive to sales data.

According to the local exchange rate, tax sales growth narrowed to 4%, far more than analysts' average forecast of 1.9%, and also improved significantly compared with zero growth in the two quarter.

It said that it is continuing to restructure itself according to the major restructuring of the industry.

Whether the sales rebound in the three quarter, whether or not it can be a trend, is enough for investors to expect the turning point.

Nils Vinge, director of group investors, told reporters: "we are focusing on pition this year, and now we see things moving in the right direction."

The slowdown in sales of the second largest clothing retailers in the world began to grow negatively in 2017, which failed to fully reflect the accumulation of consumer demand at the end of May this year to $4 billion. Management must clean up over the quarter stock through the sale of price cuts in 2015.

Analysts estimate that the same store sales decline has narrowed from 4%-5% in the two quarter to 1%-2%, and Bank of land PLC PLC portfolio manager Lars Soderfjell said that such surprise is worth the headlines, and it is also enough to boost stock prices substantially.

Management had previously predicted that same store sales would not resume until 2019.

Tang Xiaotang, analyst at No Agency, a fashion industry research and consulting firm, reiterated on Monday that he had a strong view of Swedish companies.

At the end of January, he remarked in the in-depth report of "H&M key to usher in a key year" released by the no fashion Chinese website. Although the Swedish company has many problems, it is reflected in the stock price. The continuous slump is already oversold. It is believed that the Swedish company will rebound. It is only a matter of time.

Tang Xiaotang said Monday that

The performance, turnover, reaction speed and coping styles of large companies.

The ability is far better than that of small companies. Therefore, it has long been optimistic about the Swedish brand and its old rival, Zara, the parent company of Indo textile, and also has a positive attitude towards the US giant Gap Inc. (NYSE:GPS) Guipu group and the Asia's leading Uniqlo Q.

"On the contrary, they are more worried about Chinese brands.

The size of the industry and the industry outside the river, the local clothing brand may encounter a crisis in the future, and now the tension has actually begun to build.

The biggest competitor of Hennes & Mauritz AB, Zara parent company Inditex SA (ITX.MC), Yin Di Textile Group announced last week that the comparable sales growth of 3% in the first half of fiscal year ended July was the lowest growth rate in the past four years, but management expects to accelerate to 4%-6% in the second half of the year, and the profit margin will also rise from last year's ten year low.

Hennes & Mauritz AB, however, issued a profit warning today.

One of the important tasks of the group is to innovate the logistics system in order to improve the efficiency of the supply chain and speed up the integration of online and offline channels.

The system dragged down sales and profits in the two quarter, but it has been able to promote sales in the three quarter. The management's warning system's continued problems in important markets such as the United States, France, Italy and Belgium will lead to a huge impact on the three quarter profits. Nils Vinge today revealed that the group has "fundamentally solved the problem", but the remaining pressure will continue to oppress profits in the fourth quarter.

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Analysts believe that the group lowered the entry-level pricing to compete against Primark and Amazon.com Inc. NASDAQ:AMZN, Amazon and other online and offline competitors, as well as investment strategy for long-term growth is correct, but only expected short-term profit margins will be frustrated.

During the two quarter, the group opened 40 stores for its nine brands, and increased the total number of stores worldwide to 4841 by the end of August. Most of them were H&M flagship stores that had been aggressively expanding over the past few years.

The Inditex SA Indo Textile Group has 7422 stores in 96 markets as of the end of July, including 2238 stores in Zara stores, and Bershka, Stradivarius and Pull&Bear in the young brands.

Now the two big groups have begun to reorganize their store portfolios and reduce their physical businesses, while increasing investment in technology and e-commerce to adapt to changes in consumption habits.

In the last fiscal year, online sales contributed 12% of sales to Hennes & Mauritz AB, while the proportion of Inditex SA, India and di textile group was 10%. At the beginning of this month, the group proposed that consumers can buy all its brands online by 2020, no matter where consumers live in any part of the world.

The threat of profit is not only investment and short-term setbacks, but also a variety of cost pressures.

As one of the main purchasing places of Hennes & Mauritz AB, Bangladesh has just announced that the minimum wage of textile workers will be raised by 51% from December to 8000 Tucca per month, or about 95 US dollars, which will further raise the cost of the group and even the whole industry.

However, local unions have refused to raise pay and threatened to organize workers to strike indefinitely if they could not meet the minimum monthly salary requirement of 160 million Taka.

Bangladesh is the world's second largest garment exporter after China. About 4 million garment workers in the region support the export scale of 30 billion US dollars annually, accounting for 80% of the total exports.

Today, earnings warning is completely over the top by the privatization of the daily mail.

The newspaper quoted the insider on Sunday as saying that Stefan Persson, the son of H&M founder and Hennes & Mauritz AB chairman, has approached Goldman and Sachs Group Inc. Goldman Sachs and the investment banks such as Morgan & J.P. & J.P., hoping to finance potential large-scale privatization pactions.

Hennes & Mauritz AB spokesman declined to comment on the article.

Over the past year, with the Stefan Persson increasing its holdings of shares many times, the argument of privatization has been endless. The group and Stefan Persson have repeatedly denied it.

Since its record high in 2015, Hennes & Mauritz AB (HMb.ST) has fallen by 2/3.

In the first five months of this year, Stefan Persson spent a total of about 53 million shares of Hennes & Mauritz AB (HMb.ST) shares in the open market by holding 6 billion 400 million Swedish kronor, or about 728 million US dollars, through the holding company Ramsbury Ramsbury, increasing the shareholding ratio of Ramsbury to 44.5%.

Coupled with the 5% stake held by her sister Lottie Tham and her family members, the shareholding ratio of the founding family was 49.9% and the voting power was 73.2% at the end of May.

Stefan Persson was sold off in May.

Hexagon AB (HEXAb.ST) shares were sold over 2 billion Swedish kronor, or about $227 million, and privatization rumors were further fermented.

A month later, when he attended the world's first store opened in Stockholm by the new brand Afound, he said the rumors of privatization continued to stir up from the listing of the group, emphasizing that there was no correlation between family holdings and rumors.

However, in early July, Stefan Persson increased another 8 million 650 thousand shares through several pactions.

On Monday afternoon, Hennes & Mauritz AB (HMb.ST) was further up 18.2%, the biggest increase in 17 years, with a stock price of 145.62 kronor, pushing the group's market value by 32 billion krona, or about 4 billion US dollars to 237 billion kronor, or about 26 billion 600 million US dollars.

As of last Friday, it closed at 123.16 Swedish kronor, which fell 27.1% in 2018.