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2006-12-6 03:29:00 p.m. HKT, XFNA
STOCKWATCH - Singapore-listed Hongguo extends gains on robust industry
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prospects
SINGAPORE (XFN-ASIA) - China-based shoemaker and retailer Hongguo
International Holdings Ltd was higher as investors continued to snap up the
stock, encouraged by the good fundamentals of China's footwear retailing
industry, dealers said.
At 3.14 pm, Hongguo added 0.035 sgd or 3.80 pct to 0.955 on volume of 19.
11 mln shares.
The Straits Times Index was down 10.41 points at 2,891.58.
Hongguo has risen over 36 pct in six sessions of consecutive gains.
""The recent share price appreciation, in my view, is mostly driven by
liquidity,"" Lehman Brothers analyst Christine Peng said.
Investors appear to be continuing to take heed of UBS Investment
Research's ""buy"" recommendation when it initiated coverage of the stock last
week, with a 1.10 sgd target price.
Lehman Brothers, on the other hand, continues to rate the company
""overweight,"" although the stock has surpassed its target price of 0.88 sgd.
""We are confident in Hongguo's brand power because they are one of the
largest ladies' footwear brand in China,"" Peng said.
""We are pretty comfortable with the fundamentals of Hongguo.""
A re-rating catalyst for the stock would be its full-year earnings and
the acquisition of another ladies' footwear brand, Hong Kong-listed Le Saunda
Holdings.
""The market has always been speculating that the company is going to
announce some acquisition-related activities, so I think that could be a
catalyst for Hongguo,"" Peng said.
(1 usd = 1.53 sgd)
pearl.bantillo@xfn.com xfnpb/xfnzr
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