On Tuesday, Citi reaffirmed its Buy rating and $25.00 price target for Vipshop Holdings (NYSE:VIPS), following a visit to the company's headquarters in Guangzhou. During the visit on Monday, Citi's team toured the office and engaged in discussions with Vipshop's CFO, Mr. Mark Wang, and the Investor Relations team.
The conversations covered a range of topics including shareholder returns, first-quarter trends, and guidance expectations for the first quarter of 2024. The discussions also delved into margins expectations, the Gross Merchandise Volume (GMV) and revenue discrepancy, return rates, SVIP member metrics, and the company's Shanshan outlets and capital expenditures.
Citi's analyst reported a positive impression from the visit, noting management's confidence in Vipshop's steady long-term growth prospects. Despite the conservative revenue guidance for the first quarter of 2024, which forecasts 0-5% year-over-year growth, the analyst highlighted management's focus on executing its merchandising strategy and increasing SVIP member conversion.
The analyst also pointed out that with revenue increasingly contributed by Shanshan and disciplined spending, Vipshop's margins are expected to improve gradually. The reaffirmation of the Buy rating and the $25.00 price target reflects Citi's confidence in Vipshop's strategic direction and potential for growth.
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