Belle Intl 1880

[winston]

SSS 7% only. Forward PE 18. Not vested. From Dr. Check, The Standard HK:-

One good stock to consider is Belle (1880), the mainland's largest retailer of ladies' footwear. It sells eight brands including its namesake Belle - China's top ladies' label for the past 10 years in terms of sales revenue.

Unlike many other footwear companies, Belle uses a vertically integrated business model which allows better control over supply and cost. It is also the largest retailer in the mainland for Nike and Adidas. Belle's same-store sales in the first half rose a better-than-expected 7 percent.

BNP Paribas expects Belle to post a net profit of 2.72 billion yuan (HK$3.08 billion) in 2009 and 3.06 billion yuan in 2010.

Belle yesterday closed at HK$7.55 or 18 times 2010 expected earnings. Goldman Sachs has set a HK$8 target on the stock. Near HK$7.35, it looks reasonable.

[winston]

Not sure why it was a Buy in the first place ...

DJ MARKET TALK: Citi Downgrades Belle To Sell; HK$6.70 Target

1133 [Dow Jones] STOCK CALL: Citigroup downgrades Belle (1880.HK) to Sell from Buy as says current valuation looks expensive, even after including premium for size, liquidity. Cuts target price to HK$6.70 from HK$8.00 as sales, margins of acquired footwear businesses still low; improvements in profitability may not be as fast as market currently expects. Thinks Belle interim earnings likely to underperform other Chinese discretionary companies in terms of growth.

Estimates 1H net profit of CNY1.10 billion, +11% from year earlier, operating margin to decline to 12.9% in 1H09 vs 13.8% in 1H08 due to higher discounts promotion expenses. Expects decelerating earnings growth to 13% in 2010 vs 15% in 2009. Prefers Anta (2020.HK), China Dongxiang over Belle. Also likes Xinyu Hengdeli (3389.HK), Daphne for undemanding valuations.

[winston]

=DJ UPDATE:Belle To Sell Fila China, HK, Macau Franchise To Anta

(Adds comments on the acquisitions from Anta Sports, analyst.)

HONG KONG (Dow Jones)--Belle International Holdings Ltd. is selling its Fila franchises in China, Hong Kong and Macau, which it acquired two years ago, to Anta Sports Products Ltd. (2020.HK) for at least CNY357.7 million ($52.6 million), the two Chinese companies said.

Belle cited weak economic conditions and its inexperience in developing an international brand in its domestic market for the sale of the unprofitable business.

The footwear maker said it is selling an 85% stake in a joint venture that owns the franchise for apparel maker Fila Group's trademarks in mainland China, Hong Kong, and Macau for at least CNY313 million. Fila Group owns the remaining stake in the joint venture, which made a net loss of CNY32.2 billion last year.

Belle will also sell its franchise for Fila Group's retail business in Hong Kong and Macau, which posted a net loss of HK$7.0 million last year, for HK$50 million ($6.5 million).

Citigroup analyst Christopher Leung said the deal would be a win-win for the two Chinese companies as Anta can further strengthen its brand portfolio and leverage on its expertise in brand management, while it can improve Belle's sportswear margin slightly.

Anta Sports said in a separate statement the acquisitions of the global sportswear brand represents a good opportunity to expand to the high-end sportswear market.

The acquisition of the Fila retailing business in Hong Kong and Macau will be strategically important for the development of the recognition of the Fila brand in the mainland, the Chinese sportswear retailer said.

Anta had an extensive retail network in China, with 5,667 stores nationwide operated under its brand name as at the end of 2008, while Belle managed 3,119 stores mainly in the Guangdong province.

Fila currently has about 50 outlets in China, and 10 outlets in Hong Kong and Macau, Anta sports said.

Belle bought the Fila franchises for US$49 million in August 2007.

[winston]

Belle Profit Rises 15%, Beating Analysts’ Estimates (Update1) By Wing-Gar Cheng

Aug. 26 (Bloomberg) -- Belle International Holdings Ltd., China’s largest retailer of women’s shoes, said first-half profit rose 15 percent, beating analyst estimates, after it boosted promotions to raise footwear sales.

Net income rose to 1.14 billion yuan ($167 million) or 0.13 a share from 988 million yuan or 0.12 yuan a year ago, the Shenzhen-based company said in a statement to Hong Kong’s stock exchange today. That compared with the mean estimate of 1.08 billion yuan of three analysts surveyed by Bloomberg. Sales rose 13 percent to 9.3 billion yuan.

The shoemaker, whose brands include Staccato and Joy & Peace, continued to open stores and focused more its footwear business, which has higher margins. Belle this month agreed to sell its Fila sports brand business in China, Hong Kong and Macau to Anta Sports Products Ltd. for as much as HK$600 million ($77 million).

“Consumers’ thirst for ladies shoes is insatiable and growth remains unabated,” Jessica Hong, an analyst at MainFirst Securities Hong Kong Ltd., said before the earnings announcement. “A revival of confidence in the economy will spur more consumer buying and that benefits Belle.”

Share Performance

Belle shares have risen 118 percent this year compared with a 43 percent gain in the benchmark Hang Seng Index. The stock fell 2.8 percent today to HK$7.40 at the market’s midday break, before the earnings announcement.

The company proposed to pay an interim dividend of 0.035 yuan a share from 0.03 yuan a year ago.

Belle said Aug. 12 the Fila business is unprofitable, so its disposal will improve the overall profitability of its sportswear business. The retailer also distributes Nike and Adidas sportswear in the greater China region.

“As a discretionary consumer business the sportswear market was negatively affected in a more significant way than footwear in the economic recession,” the company said today. “Mainland China will continue to be the focus of our business operations and future development.”

Belle posted a 64.5 percent gross profit margin for footwear, compared with 36.3 percent for sportswear.

Belle in the first half opened 287 new shoe stores and closed 346 sportswear outlets, taking its total to 9,325 at the end of June 30, the statement said. About 98 percent of its stores are located in mainland China, it said.

Belle, which paid HK$1.57 billion for Mirabell International Holdings Ltd. and HK$600 million for Millie’s footwear chain, has said it plans to open more shoe stores this year, targeting smaller cities in China

[winston]

Not vested. The industry is too competitive. From Dr. Check:-

One good pick is Belle (1880). It has been the No1 ladies' footwear brand in the mainland for the past 10 years in terms of sales revenue. Belle is also the mainland's largest retailer for Nike and adidas. Year-on-year, same store sales rose a better than expected 7 percent in the first half.

Selling the loss-making FILA brand business was a good move.

Goldman Sachs expects Belle's sales and profit margin to improve early next year and has set a price target of HK$9.50 or 21 times expected earnings in 2010.

( Slow growth. tough environment and the Target Price is at a Forward PE of 21 ? )

The stock closed at HK$7.64 yesterday. You may make a move around HK$7.40.

http://www.thestandard.com.hk/news_deta ... 90910&fc=7

[eauyong]

7 OCTOBER 2009

Belle (1880, $7.83) 6M Target $8.71 BUY
Zhihui Jiang – [email protected] (86 755) 8209 2443

Event: We revised up our earnings forecast and target price on Belle.


According to a survey conducted by the Ministry of Commerce, sales revenue of the Top 1000 retailers in the
first three days of the eight-day Golden Week increased 15% yoy, representing robust consumer spending
despite rather weak economic condition.


Despite operating data is not available until mid-October, management suggested 3Q09 same-store sales
(SSS) growth for footwear business could turn out to be better than the 7% level achieved in 1H09.


We believe profit margins of footwear business will be higher in 2H09 and 2010, considering more
discounting/promotional activities will no longer be needed and the synergy from newly acquired business.


Heavy inventory depressed profitability of the company’s sportswear business in 1H09. However, management
expects inventory glut to be largely cleared by year-end especially for Nike products, implying better margins in
2010. For Nike, SSS growth in recent months was flat, much better than the negative growth in 1H09 (-7%).


Based on better profitability prospect, we revised up our EPS forecast for 2009-2011 to RMB 0.310, RMB 0.384
and RMB 0.448, respectively.


The counter is trading at 21.6x 2009 PER and 18.0x 2010 PER. Valuation is undemanding, in our view.


Reiterate BUY on Belle with target price revised up to $8.71, based on 20x 2010 PER.

HONG KONG RESEARCH 7 OCTOBER 2009

[winston]

Not vested.

DJ MARKET TALK: Goldman Keeps Belle Intl At Buy; HK$11.40 Target

1207 [Dow Jones] STOCK CALL: Goldman Sachs keeps Belle International (1880.HK) at Buy, target at HK$11.40 based on 25X FY10 P/E, in line with historical median valuation of stock.

House notes Belle's same-store sales for 4Q09 represent "the best quarter in 2009 and above management's expectations," with 4Q09 footwear sales +10%, sportswear +3%.

Expects stock to re-rate on back of strong 4Q results, while tipping its 2009 earnings release as another potential positive catalyst. "We believe the robust 4Q09 operation results should help alleviate investor concerns over the company's fundamentals stemming from the share placement (in December last year)." Stock +0.7% at HK$9.45.

Source: Dow Jones Newswire

[winston]

Not vested. Tough industry ...

DJ MARKET TALK: Deutsche Bank Raises Belle Target To HK$13.06

1432 [Dow Jones] STOCK CALL: Deutsche Bank raises Belle International (1880.HK) target to HK$13.06 from HK$11.96 after revising up FY10-FY12 EPS forecast by 3%-6% to reflect better-than-expected same-store sales growth.

"We expect the integration of Belle's footwear business to bear fruit and the sportswear segment to recover from 2H onwards." Tips footwear, sportswear segments to record EBIT margin improvement in 1H10 due to higher average selling prices (footwear segment), absence of losses from Fila and closure of underperforming stores (sportswear segment).

Keeps at Buy. Stock last +2.6% at HK$11.76.


Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: MS Tips Belle As Core China Retail Sector Holding

1608 [Dow Jones] STOCK CALL: Morgan Stanley tips looking for buying opportunities in Belle International (1880.HK) on further potential share price pullback near-term.

"We remain constructive on its long-term fundamentals and view the stock as a core holding in the China retail sector."

Notes robust 3Q same-store-sales growth, +18% for footwear, +3% for sportswear, primarily due to positive calendar shift.

Notes encouraging October holiday sales. Notes 3Q store openings accelerated, total store count already above house's full-year estimate. Keeps at Overweight, target HK$14.70. Stock ends down 0.3% at HK$14.24.

Source: Dow Jones Newswire

[Muhajir]

Not vested.

Belle says Q1 store sales grows, sees pressure on costs

HONG KONG, May 26 (Reuters) - Belle International Holding Ltd <1880.HK>, world's No.4 apparel and accessories retailer by market value, posted a 22 percent rise in same-store sales for the first quarter and expects to maintain the pace this quarter, its chief executive said. But the Chinese footwear distributor also sees rising cost pressures from materials and labour.

"We sees some pressure from costs and fees," Chief Executive Sheng Baijiao told reporters after an annual general meeting. "We have to digest the pressure from rising raw material costs, labour costs and increasing tax expenses."

Sheng said the company aimed to offset the cost increases by improving sales efficiency, and would maintain a mild 3-5 percent increase in product prices this year.

Belle is a strategic partner of Nike Inc <NKE.N> and Adidas AG <ADSGn.DE>, which account for more than 80 percent of its sportswear sales. It also distributes Converse, Kappa, Puma, Reebok, Li-Ning Co Ltd <2331.HK> and Mizuno brand sport shoes.

Belle, which said its gross profit margin increased to 55.7 percent in 2010 from 53.3 percent in 2009, recorded same-store footwear sales growth of 16.5 percent in the second half of 2010, down slightly from 18 percent in the first half.

The company recorded 22 percent growth in first quarter of 2011.

"For the second quarter, (growth) will not be very different from the first quarter. The overall (business) environment has been good," Sheng said. "Performance in the first four months was better than we expected."

Sheng said the company had initially forecast same-store sales growth of 10-15 percent for this year, compared with about 17 percent growth in 2010.
Sheng forecast wages to rise 15 percent this year, higher than a 12 percent increase in 2010, but he said the rapid growth in wages should steady in 2-3 years.

The company aimed to maintain network growth of about 10 percent per year, he added. Belle, China's largest shoe retailer with more than 10,000 outlets in China, said it faced a shortage of labour and rising wages as rural workers are less willing to work far from home.

Shares of Belle were up 3.4 percent at midday on Thursday, compared with a 0.74 percent gain by the Hang Seng Index <.HSI>.

Source: Reuters