Broker snap: ASOS's plans for China at risk, says Seymour Pierce

25th Oct 2012 09:37

Seymour Pierce has raised its target price for online retailer ASOS from 1,900p to 2,350p to reflect the recent share price momentum, but the broker has maintained its 'hold' rating.Final results for the 12 months to the end of August (a new accounting date) were broadly in line with expectations.Underlying pre-tax profits jumped 40% to £44.5m, slightly above Seymour pierce's £44m forecast. The broker said that there were no real surprises in the announcement and it is not making any changes to its current-year (ending August 2013) pre-tax profit forecast of £58m. Factoring in these forecasts, the stock is trading at 48.7 times FY13 earnings.Seymour analyst Freddie George said: "The founder of BestSeller, however, who holds 27% of the equity (recently increased by one percentage point), is getting closer to the 30% bidding threshold while we believe the Chinese development plans will be pushed further into the future.""Kate Bostock, the outgoing M&S director, who has been appointed a director, in our view, adds credibility to the business but might not fit in with the unique culture," George said.BC