Belle Intl 1880

[winston]

From Dr. Check:-

The stock satisfies a very important criterion of fund managers - it is the market leader among all ladies footwear brands in the mainland.

Its shoes - geared mostly to upmarket consumers - go for between US$40 (HK$312) and US$200 a pair. Belle is also the largest retailer of both Nike and Adidas shoes in China and this bodes well in an Olympic year.

The fact that the Games are taking place in Beijing this year is an extra bonanza for all sports shoe retailers including Belle.

In the first quarter, same store sales grew 20 percent from the same period last year. The stock's expected price to earnings ratio stands at about 27 times 2007 earnings.

If the shares dip below HK$7, Belle is worth a serious look.

[la papillion]

Belle is indeed the market leader in the market for ladies shoes with around 7%++ market share. Its competitors are the HK listed Prime sucess and SG listed Hongguo. These two competitors fight among themselves for the 2nd and 3rd position. For both of them, their market share hover around 4-5% each, a safe distance from the market leader 7%++.

There is, however, some differences between the 3 competitors. Prime success and Belle sold ladies fashion wear and sports shoes/apparel. Only Hongguo specialises in ladies fashion shoes/apparel solely. Belle and Prime had also indicated their direction in pursuing this area of high growth in the near future to capitialise on the Olympic fever. Since the sportswear is highly competitive (just look at how many companies are selling sportshoes listed in HK or SG market), I suspect their margins might not be too good. Of course, I'm not discounting the fact that Belle has the most points of sales (POS) in china area. Prime does a little business in Taiwan, besides PRC. Hongguo does its business solely in China only.

Personally, I think Belle will do better if they concentrate on their ladies in house brand (Belle), which should have higher margins than selling Addidas/Nike shoes.

If one believes EPS is the ultimate driver of share prices, then let me add in that Belle's EPS isn't exactly top notch despite their market leader status. EPS (RMB) for Belle, Hongguo and Prime sucesss are as follows: $0.25, $0.28 and 0.21. That was, of course, in FY07. What happens in the future is for anyone to guess. Still, a PE of 27 times, seems a little too optimistic of Belle's future earnings prospects.

[winston]

Not vested.

HK-listed Belle Intl H1 net profit down on tax increase, lack of one-off gains

HONG KONG (XFN-ASIA) - Belle International Holdings Ltd, a China-based retailer of ladies' footwear and sportswear, said its first half to June net profit was down 1.4 pct to 988 mln yuan due to an income tax increase and a lack of one-off interest income.

For the first half of 2007, Belle had earned 364.2 mln yuan in interest on subscription funds for its IPO.

Income tax for the latest period surged to 139 mln yuan from 28.9 mln a year earlier due to a change in the domestic enterprise income tax rate.

Revenue was 8.23 bln yuan, up 60 pct, and operating profit was 1.14 bln yuan, up 64 pct, due to steady growth of footwear sales and increased contribution from sportswear.

Footwear sales increased by 52 pct to 4.25 bln yuan and sportswear rose 71 pct to 3.98 bln.

The gross profit margin was 65.0 pct for footwear and 35.6 pct for sportswear.

Belle's gross profit margin as a whole decreased to 50.8 pct from 51.6 pct as the sales contribution of sportswear, where margins are relatively lower, rose to 48.3 pct from last year's 45.4 pct.

Belle opened 2,212 new company-managed retail outlets during the first half.

At end-June, company-managed outlets totaled 8,355, of which 8,154 were in mainland China and the rest in Hong Kong, Macau and Taiwan.

[winston]

Not vested.

Belle First-Half Profit Is Little Changed at 988 Million Yuan
By Mark Lee

Sept. 10 (Bloomberg) -- Belle International Holdings Ltd., China's largest retailer of women's shoes, said first-half profit was little changed at 988 million yuan ($144 million).

Net income was 1.4 percent lower than the HK$ 1 billion reported in the previous year.

Sales rose 60 percent to 8.23 billion yuan.

The company will pay an interim dividend of 0.03 yuan, the same as last year.

[winston]

DJ MARKET TALK: Belle +2.3%; But GS Tips Staying On Sidelines

1212 [Dow Jones] Belle (1880.HK) +2.3% at HK$3.63, mild rebound after losing 9.9% over past two sessions, but weakening economic outlook unlikely to spur interest in retail stocks near-term. Goldman Sachs says same-store sales growth for December at 10% on-year for footwear vs November's 20% growth, which used heavy promotion at worse margins); says weaker SSS growth points to a challenging operating environment for retailers.

Stays positive on Belle over long run due to industry leadership, but tips remaining on sidelines for now due to near-term earnings risk. Keeps at Neutral, target HK$4.60 based on 15X 2009 P/E. Thursday's high of HK$3.70 as immediate cap.(

[winston]

BROKER CALL HK-listed Belle target cut to 4.80 hkd from 7.20 - Macquarie

BEIJING (XFN-ASIA) - Macquarie Research Equities said it is lowering its target price on Belle International Holdings Ltd to 4.80 hkd from 7.20. "We cut our net margin estimates from 12.2 pct to 11.7 pct for 2008 and 12.5 pct to 12.1 pct for 2009 on worse-than-expected footwear inventory level and margin squeeze in Hong Kong.

We also cut our earnings estimates by 12 pct and 16 pct for 2008 and 2009, respectively, " Macquarie said in a note. The call is "outperform." At 11.04 am, Hong Kong-listed Belle was down 1.55 pct at 3.18 hkd.

[winston]

DJ MARKET TALK: CS Cuts Belle Intl Target To HK$4.28 Vs HK$12.52

1622 [Dow Jones] STOCK CALL: Credit Suisse cuts Belle International (1880.HK) target price to HK$4.28 from HK$12.52 after lowering FY08-10 EPS forecasts 12%, 31%, 35% respectively, on conservative assumptions below management's guidance. Says operating performance for FY08 of lesser significance as 2009 growth drivers to differ vs 2008's new store additions; expects margins to bottom in 2H08, could improve by 1H09 depending on ability to rationalize suboptimal acquisitions, less profitable operations.

Notes current slowdown catching many Chinese retailing proxies short on initial impact on Chinese consumers' spending pattern; says earnings visibility could be better addressed by end-March during FY08 results. "Belle could continue to trade sideways along with the lackluster macro backdrop that is at risk of unveiling further weakness over the next three months. That said, long-term investors should be on the lookout for a good entry level around HK$2.80." Keeps at Outperform. Shares closed up 1.0% at HK$3.07.

[winston]

DJ MARKET TALK: JPM Ups Belle To Overweight Vs Neutral

0923 [Dow Jones] STOCK CALL: JP Morgan ups Belle International (1880.HK) to Overweight from Neutral, says worst seems to be in price, cheap valuation. Adds Belle should surprise on the upside. But cuts target to HK$4.80 from HK$7, cuts earnings forecast for FY08 by 7%, FY09 by 19% to reflect worsening macro environment for retail environment, possible margin squeeze from increased level of promotional activity.

Notes Belle not offering discount on sports retailing, but rivals who do snatch customers away, hitting Belle's revenue. Also, HK market growth rates in Oct, Nov drop, leading to unsold inventories, likelihood of inventory write-offs.

Key risks to price target, rating include further deterioration in China consumer space, inventory write-offs in HK, sports retailing segments. Stock +1.5% to HK$3.47 Thursday.

[winston]

Although their stores in China are always full of people, competition is very tough. It's not an area that I would like to invest at this point in time..

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Belle set to expand footprint by MandyLo

Belle International (1880) - the mainland's largest retailer of women's shoes - plans to invest 500 million yuan (HK$567 million) this year to expand its sales network and refurbish stores despite the economic gloom, said chief executive Sheng Baijiao.

"The impact of the financial crisis on the retail market remains uncertain, and I dare not draw conclusions now," Sheng said.

The number of Belle footwear stores will grow 10 percent to 15 percent this year.

The company managed 6,050 footwear and 3,119 sportswear shops in the mainland last year. It operated 215 stores in Hong Kong, Macau and Taiwan.

"I believe turnover and profit will record double-digit growth this year if the economic environment stops deteriorating," said Sheng.

Over the past two months, same-store sales at footwear stores grew just over 10 percent while sales at sportswear stores rose around 5 percent.

Belle said net income last year inched up 1.6 percent to 2.01 billion yuan despite sales surging 53 percent. This was because the firm's income tax exemption expired and there was no one-off interest income.

Finance income slumped 85.5 percent to 72.6 million yuan from 502.2 million yuan, due to the absence of interest income of 364.2 million yuan from its tied-up fund when the firm listed in 2007.

Earnings per share dropped 4.8 percent to 23.82 fen but the proposed final dividend remained unchanged at 3.5 fen. Revenue jumped to 17.9 billion yuan from 11.7 billion yuan.

The net profit margin declined to 11.2 percent from 17 percent, because the financial crisis affected business in Hong Kong.

The drop was also blamed on the firm leaving the United States, where its sales were worth about 20 million yuan.

Belle's share price rose 5.7 percent to close at HK$4.08 yesterday after the results announcement.

[winston]

Belle Plans More Shoe Stores to Tap China’s ‘Ample’ Potential By Wing-Gar Cheng and Stephanie Wong

March 25 (Bloomberg) -- Belle International Holdings Ltd., China’s largest retailer of women’s shoes, will boost store expansion this year, saying there’s “ample potential for growth” in the world’s most populous nation.

Chief Executive Officer Sheng Baijiao said he plans to open more outlets for the retailer of Staccato and Joy & Peace footwear after it increased shoe stores in China by 62 percent to 6,050 last year. Same-store sales for the company’s footwear division rose in the first two months of this year, he added.

Belle, which also distributes Geox shoes and Nike sportswear, posted little changed profit yesterday as surging marketing costs and a higher tax bill offset a 53 percent jump in sales. The Hong Kong-listed company, which sees disposable income in China that “keeps rising,” seeks to tap China retail sales growth that was at least 19 percent in each month of last year.

“We think management’s goal of double-digit growth in footwear sales and margins should be achievable,” Goldman Sachs Group Inc. analyst Caroline Li, who has a “neutral” rating on the stock, said in a note to clients late yesterday. “We are turning slightly more positive on the 2009 growth outlook.”

Belle’s selling and distribution expenses rose 69 percent to 5.68 billion yuan ($832 million) as it expanded into China’s second- and third-tier cities. The company’s total retail stores surged 51 percent to 9,169 by the end of last year.

‘Without Limits’

“There’s still ample potential for growth for footwear,” Sheng told reporters at a briefing in Hong Kong yesterday.

Potential growth in international casual footwear is “without limits,” the company said in its earnings statement.

Belle’s 2008 net income rose to 2.01 billion yuan or 0.24 yuan a share, from 1.98 billion yuan or 0.25 yuan, a year earlier. That compares with an average estimate of 1.96 billion yuan by four analysts in a Bloomberg survey. Sales rose 53 percent to 17.9 billion yuan.

“Their advertising and promotion costs are high but they need to boost spending more in this area to capture greater consumer market share,” Sophie Fan, Hong Kong-based consumer analyst at CSC Securities HK Ltd., said before the earnings announcement. “Their products are too diversified and they aren’t focusing on any specific brands,” said Fan, who recommends buying Belle’s stock.

Same-Store Sales

Belle shares advanced 5.7 percent to HK$4.08 in Hong Kong trading yesterday, the most in two weeks. The climb pushed the stock’s gains this year to 20 percent, compared with a 3.3 percent drop in the benchmark Hang Seng Index and a 2 percent decline in the Hang Seng Composite Index.

Sales at shoe stores open for at least a year rose between 10 percent and 15 percent in the first two months of 2009, Sheng said. Comparable or same-store sales are used to measure a retailer’s performance because they exclude locations that have recently opened or closed.

The sportswear business increased as much as 5 percent over the same period, Sheng added, without giving further details.

“The rapid expansion of the retail network in 2008 from both organic growth and also acquisitions will be the foundation for revenue growth in the next few years especially 2009,” Belle said in its statement.

The nation’s sportswear industry as a whole had overestimated demand for sporting products ahead of the Beijing Olympics and faced high inventory, Sheng said. Belle’s inventory level has fallen this year especially after the Lunar New Year holidays, he said, without providing details.

Belle reported a sixfold rise in its tax bill to 257.6 million yuan as a two-year exemption from corporate income tax ended.