Analysts still love this Chinese supplier to Nike and Adidas
Hong Kong
SHARES of Shenzhou International Group Holdings Ltd, a Chinese manufacturer that is a top supplier to Nike Inc and Adidas AG, appear expensive when compared to its domestic peers. But analysts say the valuation premium is well deserved.
The optimism is partly driven by Shenzhou's strategy to boost investments in automation as well as spending on more research and development, which have resulted in a widening of its profit margin to near record highs. Investor faith in Shenzhou's outlook is also reinforced by its position as the country's largest maker of knitwear, as smaller manufacturers lose market share, amid a likely shakeout from growing trade tension with the US.
