Kuala Lumpur, June 23, 2006 AEST (ABN Newswire) - DMG & Partners Securities has reaffirmed its confidence with Singapore-listed shoemaker, Hongguo International (SGX: H14), given the successful branding of its footwear as well as its proposed expansion plans.
The Singapore broker pointed out the company's brands - E. Blan and the newly-launched C. Banner - were kicking up sales in China
Striding on the popularity of its brands, the ladies' shoemaker and designer will also expand its retail outlets to 730 by the end of fiscal 2006 from 650 at the close of the last financial year.
Given the proposed expansions, its management has allocated RMB18 million to increase production capacity over the second half of the year. By the first half of next year, Hongguo is expected to produce 3.9 million pairs of shoes.
Earnings for fiscal 2006 are expected to rise to RMB91.2 million from last year's RMB70.9 million, said the broker.
The broker re-initiated coverage on the shoe manufacturer with a target price of SGD$0.69.
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Daniel Peter
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