Stock Focus: LVMH

 The stock I’m talking about today is LVMH (Louis Vuitton Moët Hennessy) which I guess needs no introduction. It's a brand that is easily recognizable and counts Lisa and Zendaya, to name a few A-listed celebrities who endorses their brands. But does being a world class brand translate into a compelling stock to invest in?

Please note this is not a buy or sell recommendation and do your own self diligence when investing.

1. Company Overview

LVMH was created in 1987 through the merger of fashion house Louis Vuitton (founded in 1854) with Moët Hennessy, which had been established by the 1971 merger of champagne producer Moët & Chandon (founded in 1743) and cognac producer Hennessy (founded in 1765). Bernard Arnault has led the Group since 1989 and is the majority shareholder, pursuing a clearly focused vision. Under his leadership, LVMH has grown to become the world's largest luxury goods conglomerate.

2. Industry & Market Analysis

The luxury goods market has been on a roller coaster journey over the past few years. During the pre Covid period, the luxury market was on a steady growth trajectory, driven by rising global wealth, international tourism and strong demand from Chinese consumers. After Covid struck, it's not surprising the luxury market took a dive due to travel restrictions and economic uncertainty. There was a strong rebound post Covid when countries opened up their borders and lives returned to normality. But in 2025, after years of robust post pandemic growth, it is starting to slow down again. The demand for luxury goods from key markets, especially China is also weakening. 

There seems to be a huge shift in China’s consumer patterns as economic uncertainty looms and erodes consumer confidence. The recent fall out in the Chinese property market didn't help matters either. Chinese consumers are now more cautious on high ticket luxury items and there are also signs that consumers are now prioritizing experiences over material goods, especially among the younger consumers. 

In 2025, the industry faces a pivotal shift as growth decelerates, and businesses adjust to evolving consumer demands, technological advancements, and economic challenges. The post-pandemic landscape is defined by a more measured and sustainable approach to expansion, an increasing emphasis on digital and experiential luxury, and emerging global opportunities. As China’s leading position comes under scrutiny, new markets like India gain prominence. Despite facing volatile macroeconomic conditions and shifting consumer trends, the group’s diversified portfolio and global presence have enabled it to maintain its leadership in the luxury sector.

3. Business Model & Strategy

LVMH is the undisputed market leader in the luxury space with 75+ prestigious brands across wines & spirits, fashion & leather goods, perfumes & cosmetics, watches & jewelry, and selective retailing under its belt. Each brand operates with significant autonomy while benefiting from group resources and there is also strong emphasis on product quality, craftsmanship, and innovation across all its brands.

Its diverse portfolio prevents it from being overly reliant on any single brand or segment and its market leadership gives it a huge competitive advantage with premium pricing power, high margins, and a robust global distribution network.

2025 has been a challenging year so far and the company is proactively taking steps to ride out the head winds and stay ahead of its competitors. LVMH is shifting its core strategy toward ultra-affluent customers, positioning luxury as an everyday experience for the elite rather than an occasional treat for aspirational buyers. To reduce exposure to geopolitical risks and tariff challenges, LVMH is restructuring its supply chain by expanding regional operations, broadening its network of suppliers, and relocating production closer to key markets. This strategy strengthens the company against trade uncertainties and currency fluctuations. Additionally, expanding into stable regions like Europe and fast-growing economies provides further protection against localized economic downturns.

4. Financial Analysis

Over the past five years, LVMH has consistently expanded its revenue base, with notable growth following the pandemic-affected year of 2020. The group’s performance peaked in 2023, before moderating in 2024 amid global economic headwinds and currency fluctuations.

Revenue Growth:

LVMH’s revenue rose from €79.2 billion in 2022 to a record €86.2 billion in 2023, before easing to €84.7 billion in 2024. This trajectory reflects both the group’s recovery from the pandemic and the impact of softer luxury demand in key markets in 2024.

Profitability:

Operating profit climbed from €21.1 billion in 2022 to €22.8 billion in 2023, then declined to €19.6 billion in 2024. The operating margin contracted from 26.5% in 2023 to 23.1% in 2024, reflecting increased cost pressures and less favorable market conditions.

Net Profit:

Net profit reached €15.95 billion in 2023, before falling to €12.96 billion in 2024, mirroring trends in revenue and operating profit.

Business Segments:

Fashion & Leather Goods continued to be the group’s powerhouse, contributing the largest share of revenue and profit. However, this segment, along with Wines & Spirits and Watches & Jewelry, experienced declines in 2024. The Selective Retailing segment, which includes Sephora, remained resilient and stable.

For FY2024, LVMH reported revenue of €84.7 billion, down 2% year-on-year. Profit from recurring operations was €19.6 billion, a 14% decrease from 2023. Net profit attributable to the group was €12.6 billion. Despite the revenue and profit declines, free cash flow increased by 29% to €10.5 billion, underscoring the group’s strong cash generation.

Growth was mainly driven by Europe, the United States, and Japan, while performance in Asia was mixed due to evolving Chinese consumer behavior. Currency headwinds, particularly the strong euro, negatively impacted reported results, especially in the Fashion & Leather Goods and Wines & Spirits segments.

In its latest Q1 2025 results, LVMH posted revenue of €20.3 billion for the first quarter of 2025, down 2% year-on-year (down 3% on an organic basis). Europe showed continued growth at constant scope and currency, while the United States saw a slight decline. Japan remained stable, and the rest of Asia was flat or slightly down, reflecting a normalization in Chinese demand after a period of strong growth.

Segment performance for Q1 2025:

Fashion & Leather Goods: €10.1 billion (down 4% YoY)

Perfumes & Cosmetics: €2.18 billion (flat YoY)

Watches & Jewelry: €2.48 billion (up 1% YoY)

Wines & Spirits: €1.3 billion (down 8% YoY)

Selective Retailing: €4.19 billion (flat YoY)

The table below compares key metrics between LVMH and its peers, highlighting why LVMH stock has underperformed. While I wouldn’t say the company is in dire straits, it has certainly hit a roadblock. To regain momentum, LVMH must explore new avenues for growth—otherwise, it risks falling behind Hermès and Richemont. 

Metric	LVMH	Hermes	Richemont	Kering
Price return 1yr	-32.5%	12.8%	12.6%	-41%
Price return 3yr	-8%	150.9%	84.4%	-61.7%
Price return 5yr	23.8%	216.1%	190.4%	-64%
PE Ratio	20.9	59.5	27.6	21.1
Debt / Equity	0.59	0.12	0.59	1.28
Current Ratio	1.41	4.26	2.9	1.1
Revenue growth (YoY)	-1.8%	13%	3.8%	-12.1%
ROE	19.6%	28.5%	17.6%	7.7%

Source: Seeking Alpha

5. Risks & Challenges

With China’s economy slowing and Chinese consumers becoming more selective with their spending, LVMH must seek new markets to sustain revenue growth. However, if a global recession is triggered by ongoing trade tensions, this strategy could be disrupted. Additionally, LVMH faces fierce competition from Hermès, which has pursued a different approach to growth. As of April 2025, Hermès has overtaken LVMH as the world’s most valuable luxury company by market capitalization, focusing on an ultra-high-net-worth clientele. This strategy makes Hermès less vulnerable to economic downturns that affect aspirational and middle-class luxury buyers.

6. Conclusion

Although LVMH stock has underperformed, I still believe its business fundamentals remain strong. I have dollar-cost averaged within the €450 to €600 range, maintaining confidence in the company’s long-term prospects. Additionally, I have also initiated a position in Hermès, though the stock is currently somewhat overpriced. If there are dips in the share price, I plan to add more Hermès shares to my portfolio also.

Investing in China EV Market- Worth it ?

Over the past few months, I’ve noticed an increasing number of BYD cars alongside Teslas on Singapore’s roads. It made me wonder—perhaps the EV market isn’t just about Elon Musk and Tesla. Could it be a promising investment opportunity? To find out, I decided to delve deeper into the EV industry.

Pls note this is not investment advice and exercise due diligence when investing. 

1. EV Industry Overview

According to the International Energy Agency (IEA), global EV sales exceeded 17 million units in 2024, reflecting the rapid expansion of the market. Increasing consumer adoption, alongside strategic investments by manufacturers and governments, is propelling electric mobility forward. If current trends continue, the IEA projects that EVs could account for over 40% of global new car sales by 2030.

China remains the world’s largest EV market, with nearly half of all new cars sold in 2024 being electric. Scandinavian countries lead in EV adoption, with Norway at the forefront—80% of its new car sales were EVs. Interestingly, while Tesla dominates the U.S. EV space, adoption in the U.S. lags behind Europe and China. In 2024, EVs comprised over 10% of new car sales in the U.S., with growth continuing but at a slower pace than other regions.

As the industry shifts from rapid expansion to a recalibration phase, companies are adapting their strategies to evolving customer demands and regulatory changes. Analysts suggest this transition will enhance efficiency and sustainability, fostering stronger business models, increased domestic component production, and the integration of advanced battery and connectivity technologies.

2. Battery Technology

Battery technology is arguably the most exciting and critical aspect of the EV industry.

At its core, an EV battery relies on chemical reactions to transfer lithium ions between the anode and cathode during charging and discharging. Charging forces lithium ions to one side, while driving sends them back, releasing energy to power the vehicle’s motor.

EVs predominantly use lithium-ion batteries due to their balance of energy density, efficiency, and durability. Most models offer a driving range of 200–300 miles per charge, while premium models exceed 400 miles. Advances in battery capacity and weight reduction continue to enhance vehicle performance. However, lithium-ion technology has limitations in energy density, posing challenges for manufacturers striving for longer ranges. Nonetheless, battery costs have plummeted—from over $1,000 per kilowatt-hour to below $150—making EVs more accessible and affordable.

The industry is actively exploring next-generation batteries beyond lithium. Solid-state batteries, for example, use a solid electrolyte instead of a liquid one, enabling faster charging, enhanced safety (lower fire risk), and increased energy density. Another promising development is sodium-ion batteries—sodium is far more abundant than lithium, potentially making EVs more sustainable and cost-effective. However, sodium batteries have lower energy density due to the heavier nature of sodium ions, limiting their suitability for high-performance EV applications.

China dominates the EV battery sector, controlling between 67.5% and 80% of the global market. In Q1 2025, six Chinese companies accounted for 67.5% of total global EV battery supply.

Two major players stand out:

• CATL (Contemporary Amperex Technology Co. Limited): The world’s leading EV battery supplier, with an installed capacity of 84.9 GWh—a 40.2% year-over-year increase. CATL continues to expand its presence in Europe and North America.

• BYD: While widely recognized as an EV manufacturer, BYD is also a battery supplier. In Q1 2025, BYD recorded a remarkable 62% year-over-year growth, reaching 37 GWh in battery installations. Its integrated approach—combining EV production with battery manufacturing—offers cost advantages and faster innovation cycles, optimizing battery solutions for its vehicles.

3. Investment Thesis

I’ve been monitoring the EV industry for a while, particularly the battery giant CATL. Its dominant position in battery technology makes it a compelling stock. CATL is listed on the Shenzhen Stock Exchange (ticker: 300750) and currently trades around 250 CNY. Unfortunately, I couldn’t purchase shares since they’re restricted to accredited investors.

One alternative is investing through an ETF. I currently hold shares in the Global X China Electric Vehicle and Battery ETF (ticker: 2845 for HKD, 9845 for USD), listed on the Hong Kong Stock Exchange. Managed by Mirae Asset Global Investments, this ETF was launched in January 2020 and has an expense ratio of 0.68%, with assets under management (AUM) around 1 billion HKD. The fund targets Chinese companies positioned to benefit from growing EV adoption, including manufacturers like BYD, which is currently its largest holding.

From what I see, China’s EV industry will continue to grow and might even become the most dominant EV manufacturer in years to come. As of now I do have a position in this etf and will continue to add on if the opportunity arises.

What to invest in using CPF OA ?

Please note I’m not a financial advisor and this is not investment advice. 

In early March, I decided to invest a portion of my CPF OA funds. To make an informed choice, I researched various brokerage options and watched several YouTube videos. After careful consideration, I opted for POEMS, primarily because it provides access to funds with global equity exposure—something CPF funds cannot be used for when investing in individual foreign stocks. While I also considered Endowus, which I already use for my SRS investments, POEMS seemed like the better fit for this purpose.

For those looking to explore CPF investment platforms in depth, I highly recommend checking out Chris @HoneyMoneySG. His YouTube videos offer a comprehensive analysis of the different options available.

Once my account was set up, the real challenge began—deciding where to invest. I had already settled on investing in ETFs or mutual funds but wasn’t sure how to structure my portfolio. Eventually, I landed on a simple allocation: two ETFs and two mutual funds, each comprising roughly 25% of my investment.

My CPF investment strategy was straightforward—outperform the 2.5% OA returns without taking excessive risks with what I consider my “coffin money.” With this in mind, I allocated the first 25% to the NikkoAM SGD IGBond ETF (Ticker MBH). This ETF is designed to mirror the performance of SGD-denominated investment-grade non-sovereign bonds and carries a total expense ratio of 0.26%. Its top holdings consist mainly of bonds issued by large, reputable financial institutions. As of June 7, 2025, it offers a yield of approximately 3.25%.

Source: Nikko Asset  Management

The next 25% of my CPF investment was allocated to NikkoAM-STC Asia REIT (Ticker CFA), a REIT ETF with a total expense ratio of 0.55%. Most REIT investors should be familiar with many of its top holdings, as several are listed on the SGX. LINK REIT, based in Hong Kong, is the largest REIT in Asia by market capitalization, while Embassy Office Parks REIT holds the distinction of being India’s first publicly listed REIT.

As of June 7, 2025, the ETF offers a yield of approximately 5.98%. Both investments were made via FSMOne, which charges a flat fee of $3.80 for SGX ETF transactions, including those funded through CPF.

Source: Nikko Asset  Management

For the remaining 50% of my CPF investment, I chose two Amundi funds that track the MSCI World Index and MSCI Emerging Markets Index. These funds provide exposure to a diversified portfolio of global stocks while maintaining relatively low management fees.

The breakdown of the respective holdings is shown in the table below:

Source: Amundi Factsheet for MSCI World Index

Source: Amundi Factsheet for MSCI Emerging Markets

The table below summarizes the three funds, highlighting their fees and performance. Based on these factors, Amundi Prime US Fund appears to be the better choice.

My decision to invest in the World and Emerging Markets indexes was driven purely by diversification. However, it’s worth noting that the top 10 holdings of the MSCI World Index remain predominantly large-cap U.S. stocks. 

Fund	Amundi Prime USA	Amundi Index MSCI World	Amundi Index MSCI Emerging Markets
Expense Ratio (TER)	0.05%	0.10%	0.18%
1-Year Performance	8.65%	8.56%	7.65%
3-Year Performance	12.11%	10.90%	2.86%
Underlying Index	Solactive GBS USA Large & Mid Cap	MSCI World Index	MSCI Emerging Markets Index
Geographic Focus	United States only	Developed markets globally	Emerging markets globally
Market Coverage	Large & Mid Cap US stocks	Large & Mid Cap developed market stocks	Large & Mid Cap (~85% of free float market cap)

Source: Endowus

So this is the thought process for my CPF investments, no frills, no overthinking, just keep it nice and simple.