Citi increases target price to 85 dollars

View the latest quotes

Beijing Time November 4 Evening News, Citigroup announced in Monday that its target price for the VIPS will be raised from USD 50 to $85, largely on the grounds that Citigroup analysts expect the sales growth rate to increase, operational efficiency will improve and warehousing growth constraints will fall.

Citigroup analyst Li Muzhi, Salassi (Ravi sarathy) and Zhao Gri said that the fast retailer's storage area would rise from the current 220,000 square meters to the end of 2015 to 600,000 flat, which would eliminate "one of the biggest hurdles" to growth.

At the operational level, the longer-term rate of return (according to the Nine that the current rate of return is about 20% per cent) may fall as the only product enters the higher end of the mass market brand (TOD ' s, West, Lee, LESPORTSAC, etc.). Citigroup analysts expect sales to rise 130% in 2013, 70% in 2014 and 48% in 2015, but the former are still slightly above the current market-wide forecast for 2013 128% and 2014 62%.