There are headline risks in mainland China for sure and yes doing  business there has gotten tougher and COVID-19 lockdowns are  unhelpful. All in, it is likely other markets will grow more quickly this  year as was the case last year, and this could provide a better  balance for the industry. We remain convinced that luxury sales will  be supported in that market for the long term and explain why. 

Globally, the luxury industry should see record sales in 2022 with,  outside of mainland China, likely continued strong growth coming  out of the US and a possible top-up from consolidation. On the  margin front, notably for the bigger brands, support will come from  scale, operating leverage, pricing power and a bit of FX. We continue  to favor LVMH, Richemont, Kering and Prada, all with Buy ratings, and upgrade Swatch to Buy (from Hold).