Online shopping firm ASOS is far-and-away the biggest company on Aim, so traders and the market tend to take notice when it reports. This week it reports results for the six months to end February.
Scribes at HSBC on Friday said the group's exit from China, reported on Tuesday, despite resulting in an exceptional cost of £10mln will free up resources for priority markets.
"China exit reflects commercial reality and required investment of operating in a highly competitive market," the broker said, repeating a 'buy' rating and target price or 4,500p - an upside to the current price of around 34%.
It expects 2016 estimates to benefit from a £2m incremental investment and FY17/18e to benefit from £4mln incremental investment.
Numis also rates the hares a 'buy' (target: 4,250p). It expects first half (H1) sales growth of +20%, supporting H1 profit before tax of £20.0mln, ahead of last year even after the inclusion of £6.3mln of insurance credits.
"Elsewhere, we will be interested in the moving parts on gross margin (likely to have seen an improvement in Q2 from stronger full price sell-through), early feedback from the implementation of the loyalty scheme (A-List), implementation of initiatives, and progress on logistics.
"We continue to believe that ASOS has a standout proposition, combining a sharp demographic focus, a credible fashion brand, an extensive range of top third-party brands, genuine fast fashion own-label product, content, and a leading delivery proposition," said analyst Andrew Wade.
Shore Capital's George Mensah said that while the UK no longer represents more than half of all group sales, it remains pivotal to the group's first half sales surge. It estimates UK sales grew 24.7% year-on-year in the home market.
“Trading in the EU remains a key focus for ASOS and our H1 2016 estimate of c23% revenue growth indicates that the company is still growing in a competitive landscape. Our understanding is that there was an acceleration in Europe towards the end of P2, although we believe that the period overall saw low double-digit growth in a region that was challenging for fast fashion retailers during the period; we note the statement from H&M where European sales growth lagged behind the progression achieved in other geographies,” Mensah said.
Junior pharma services group Ergomed showed revenues lifted 25% in 2015 with orders also rising strongly, so investors will no doubt be keen to see the break-down of the financial statements.
The company splits its business between services supply and drug co-development deals. Revenues for 2015 were around £29mln (£24mln including acquisition PrimeVigilance on a pro-forma basis).
City broker Stifel estimated earlier this year that Ergomed trades at a 17% discount to its contract research outsource peers, despite its superior growth and not including the added value in its co-development portfolio.
Significant announcements expected
Interims: ASOS PLC (LON:ASC), Etalon Group (LON:ETLN), Hydrodec Group PLC (LON:HYR), Nanoco Group (LON:NANO), SCS Group PLC (LON:SCS)
Finals: EKF Diagnostics Holdings PLC (LON:EKF), Ergomed PLC (LON:ERGO), LiDCO Group plc (LON:LID), MP Evans Group PLC (LON:MPE), Next Fifteen Communications Group PLC (LON:NFC), TLA Worldwide (LON:TLA), TyraTech Inc (LON:TYR)
Trading statements: Michael Page International PLC (LON:MPI)
Economic: UK – Retail Prices, DCLG House Price Index, Producer Prices. US – NFIB Business Optimism, Import/Export Prices, Monthly Budget Statement