The Hour Glass (HG SP)
Initiation Report: 17 February 2022
Time is money
- The Hour Glass Limited is a specialty luxury watch retail group with multi-brand and standalone boutiques in the Asia Pacific Region. The group also owns Watches of Switzerland, a watch retail chain in Singapore that deals in mid-tier to high-end Swiss timepieces.
- Power in luxury goods. Bain & Company estimates that luxury goods spending will hit record levels in 2022, while price hikes for luxury products will continue to occur, with some hitting double-digit increases.
- Asia’s consumers to spearhead global consumption growth. Offering a $10 trillion opportunity, Asian consumers are expected to account for half of global consumption growth in the next decade, according to estimates by McKinsey.
- Quick recovery from Covid-19. Swiss watch exports hit a 5-year high in 2021, representing a gain of 31.4% YoY. On the consumption side, Singapore’s retail sales recorded a blockbuster growth in 2021, snapping a 3-year losing streak. Meanwhile, retail sales in both Malaysia and Thailand are on a path of recovery and are almost back to pre-pandemic levels.
- Initiate with Outperform and S$2.32 target price.
