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  • The Haney Group Advise Clients On L'Oreal Buy 0 comments
    Sep 1, 2013 3:54 AM

    The Haney Group is looking closely at L'Oreal SA as the world's largest manufacturer of cosmetics buys Magic Holdings Intl Ltd of China.

    The Haney Group a boutique equity research and management firm based in Hong Kong founded by a diverse private wealth consortium of financial professionals, with a combined knowledge of the stock markets, tax legislation, legal compliance and market analysis. Priding themselves in giving the very best service to their institutional investors, high net worth individuals and private investors today focused on the purchase of one of China's largest beauty care companies and maker of the number one selling facial mask brand in the country by L'Oreal which comes at an opportune time for the cosmetics giant.

    L'Oreal, which has recently seen a diminishing demand for its products and reached a slowing pace throughout the globe following the latest period of economic downturn will now expand in to a market that is outpacing sales growth, the company has entered the Chinese beauty care market which is expanding by 8 percent a year, a rate far out performing L'Oreal's own growth. By purchasing Magic Holdings for $843 million, L'Oreal gains access to China's $34 billion a year beauty and cosmetics market. This market is growing rapidly alongside China's burgeoning middle class in the nation of 1.3 billion people making it the most highly lucrative market for this sector. One of the brands purchased under the deal is the 10-year-old MG line, which accounts for 26.4 percent of all sales of facial masks within the country.

    "This was a very strategic move by L'Oreal to buy Magic Holdings International Limited, they have missed sales estimates for the last two years and now they have gained immediate access and existing revenue streams in the fastest growing market on the planet for their products. The acquisition will bolster their presence in this highly lucrative market with product line's ranging in the low to mid end fitting well with the growing economy as consumer spending increases in the region, the markets are a good representation, judging them accordingly in trading," announced David Roberts, the Senior Vice President of Mergers and Acquisitions at The Haney Group.

    Magic Holdings, which has a network of 288 distributors in 32 provinces within China, has reported excellent results this year led by their MG branded beauty products boosted further by the latest acquisition. MHI's stock had prior to the purchase gained 50 percent this year on the back of strong results and this was further enhanced as news of the sale pushed its value by a further 19 percent to HK$5.99. L'Oreal's share value also advanced by 0.5 percent to 129.55 EUR, bringing the company's gains to 23 percent so far for the year with further gains expected to follow.

    "With the latest acquisition by L'Oreal they have yet again demonstrated why they're the number one cosmetics maker and with rumors of a second company buyout on the horizon they will be able to firmly secure their foothold within China guaranteeing to reach the company's target for the year ending. This latest acquisition has brought a lot of attention and is increasing our confidence that L'Oreal will become a lucrative cosmetics company within the region and is expected to offer investors a lot of new opportunities that will return good profits, we shall continue to monitor them closely on our client's behalf," added David Roberts, the Senior Vice President of Mergers and Acquisitions at The Haney Group.

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