Li & Fung 0494

Re: Li & Fung 0494

Postby winston » Thu Jun 11, 2009 9:46 am

Not vested. No growth and PE > 30 ..

DJ MARKET TALK: Li & Fung Likely To Lag More; UOB Keeps As Sell

0817 [Dow Jones] Li & Fung (0494.HK) likely to underperform further in near term, though absolute downside likely limited after 3-day, 11.4% fall (vs HSI +0.6%); Wednesday's low of HK$21.50 may act as support.

Company won't owe anything to factories that supplied goods to Arcandor AG (ARO.XE) in event insolvent German retailer defaults on payments to them, Li & Fung MD William Fung tells Dow Jones; adds, Arcandor owes company outstanding commissions totaling US$5.4 million.

UOB KayHian keeps stock as Sell, fair price unchanged at HK$15.60; says sourcing giant may lose one more major customer, after already losing KB Toys, Mervyn's; adds, company still faces sluggish sales, credit risk. Stock ended off 4.1% at HK$22.15 yesterday
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Re: Li & Fung 0494

Postby winston » Thu Jun 11, 2009 11:48 am

DJ MARKET TALK: Li & Fung Bid Down 1.1%; Buy Around HK$20 - DBS

0939 [Dow Jones] At pre-open, Li & Fung (0494.HK) down 1.1% at HK$21.90, after 3-session, 11.4% fall; Wednesday's low of HK$21.50 immediate support. Stock underperforming after major customer Arcandor AG (ARO.XE) filed for insolvency, owes Li & Fung outstanding commissions totaling US$5.4 million.

DBS Vickers says likely reduced sales from Arcandor makes 3-year plan targets challenging; adds, sourcing giant's customers remain conservative on business outlook, keep inventory levels low, Still, house upgrades Li & Fung to Hold from Fully Valued due to stock's recent correction, tweaks target price to HK$23.50 from HK$23.20, suggests investors buy around HK$20.
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Re: Li & Fung 0494

Postby winston » Thu Jun 11, 2009 2:12 pm

Not vested.

Li & Fung Shares Slide for Fourth Day on Arcandor Insolvency By Frank Longid

June 11 (Bloomberg) -- Li & Fung Ltd., which supplies retailers worldwide, fell for the fourth day in Hong Kong trading on uncertainty surrounding client Arcandor AG, the German retailer that filed for insolvency.

http://www.bloomberg.com/apps/news?pid= ... WAcUCklmR0
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Re: Li & Fung 0494

Postby winston » Fri Jun 12, 2009 3:45 pm

DJ MARKET TALK: Li & Fung +4.1%; Valuation Attractive - UBS

1041 [Dow Jones] Li & Fung (0494.HK) +4.1% at HK$22.75, as bargain-hunters stepping in after 4-day, 12.6% fall, which likely to have more than discounted concerns earnings will take hit after major customer Arcandor AG (ARO.XE) filed for insolvency.

Volume hefty at HK$187.4 million, suggesting strong bargain-hunting interest. UBS estimates Karstadt (Arcandor unit) contributes US$500 million in turnover to Li & Fung, representing roughly 3% of 2009 sales estimates; also expects less than 4% loss in earnings including loss on outstanding commissions.

Keeps Buy call, HK$26.00 target prices; finds L&F attractive based on historical valuation, with stock trading between 20X, 30X forward earnings since 2000 if removes peak valuations in 2000, 2007, vs stock now trades at 17.0X FY10 P/E
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Re: Li & Fung 0494

Postby winston » Fri Aug 14, 2009 7:46 am

Cuts help Li & Fung by Kathy Wang, The Standard HK

Lower operating costs have boosted Li & Fung's (0494) first- half profit by 13 percent.
Net income rose to HK$1.4 billion in the first six months from HK$1.24 billion a year ago. Revenue dipped 2 percent to HK$46.29 billion after some overseas customers went bankrupt.

Now, Li & Fung - the world's biggest exporter of textiles and clothing - is waiting for retail data from the "back to school season" in the United States to see whether its biggest market is on the road to recovery, managing director William Fung said yesterday.

The company, which includes Wal-Mart and Marks & Spencer among its customers, is on track to meet its target of cutting costs by 10 percent in 2009, Fung said.

"The second half will be stronger in terms of bottom-line profit," said Bruce Rockowitz, president of Li & Fung. "We feel pretty confident about this."

Fung also said the firm is seeking to expand and is looking at the health and beauty sector. "With US$1 billion (HK$7.8 billion) available from earlier fund raising, we are well- positioned to catch up on merger and acquisition opportunities in the US and Europe," he added.

China remained Li & Fung's top sourcing country, accounting for 50 percent of the total in the first half.

The United States contributed 61 percent of turnover during that period. Europe was second, accounting for 30 percent .

http://www.bloomberg.com/apps/news?pid= ... iPAjjvMXRA
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Re: Li & Fung 0494

Postby winston » Thu Sep 10, 2009 3:30 pm

Li & Fung’s Rockowitz Sees ‘Positive Buzz’ in U.S. (Update3)
By Susan Li and Wing-Gar Cheng

Sept. 10 (Bloomberg) -- Li & Fung Ltd., the biggest supplier of clothes and toys to Wal-Mart Stores Inc., sees a “more positive buzz” in the U.S. and has been getting “pretty strong” re-orders from retailers, driving up its shares.

“We’re starting to see a little bit of a creep-up in spending,” President Bruce Rockowitz said in a Bloomberg Television interview today. “Definitely, the mid-tier retailers and the discount retailers are performing pretty well.”

Li & Fung, founded in China near the end of the Qing Dynasty, 5 percent to HK$30.20 at the midday break in Hong Kong trading. Its market value has more than doubled in 2009 as it accelerates efforts to add customers, buys smaller rivals and signs outsourcing deals amid the global recession.

“The rate of decline that’s taking place is slowing, and it’s a question of have we bottomed and are we going up,” said John Rowsell, a managing director at Man Group Plc, which controls $43 billion of investments, including commodities and hedge funds. “Consumers are still somewhat dampened and I still am pretty hesitant about the U.S. economy.”

U.S. unemployment rose to 9.7 percent in August, a quarter- century high, according to Labor Department data released last week. The job-openings rate fell to 1.8 percent in July from 1.9 percent the previous month, with 2.4 million positions available, the Bureau of Labor Statistics said yesterday. Consumer spending accounts for about 70 percent of the economy.

Best Performer

Li & Fung, the Hang Seng Index’s best performer in the past month, said Aug. 13 first-half profit rose 13 percent to HK$1.4 billion ($180 million), beating analyst estimates, on cost- cutting. The stock has more than doubled this year, beating the index’s 48 percent climb. It traded at HK$30.20 during the market’s midday break.

Hong Kong-based Li & Fung, also a supplier to Inditex SA’s Zara and Marks & Spencer Group Plc, seeks to spur sales through outsourcing deals and acquisitions, Rockowitz said.

“Some major retailers are looking to move to us, and have moved to us, their complete supply chain because they see that they can get better prices, quicker delivery,” he said.

The company is also seeking potential acquisitions in the U.S. and Europe and is “in a position to buy,” Rockowitz said, without identifying any targets.

“The pipeline is pretty full. We see a lot of great opportunity in the United States,” he said. “We’re seeing in the U.K., Germany, quite a few acquisitions that we’re working on today.”

Talbots Deal

The company last month announced an outsourcing agreement with Talbots Inc., a U.S. women’s clothing chain with 586 stores nationwide. It expects to generate as much as $400 million in volume with the retailer this year.

In April, Li & Fung completed an $83 million agreement to buy the sourcing business of Liz Claiborne Inc., whose brands include Kate Spade and Juicy Couture. The deal may boost sales by $1 billion, according to the company.

Profit will be “stronger” in the second half, Rockowitz said Aug. 13. The company remains committed to its target of $20 billion in sales by next year. Its U.S. onshore business may generate $1.5 billion revenue this year, and the European operations will break even this year and may have $1 billion of sales in 2010, Managing Director William Fung said Aug. 13.

Bentonville, Arkansas-based Walmart had second-quarter profit of $3.44 billion, or 88 cents a share, more than the 86 cent average of 22 estimates compiled by Bloomberg.

Li & Fung made 61 percent of its HK$46 billion first-half sales in the U.S., with its European operations contributing 30 percent.

Retail Bankruptcies

Li & Fung is seeking faster payments from Arcandor AG, which filed for insolvency in the first half. The company is still supplying the German retailer. Arcandor’s assets may be sold to other companies, which may continue to rely on the Hong Kong trader as a supplier. Li & Fung said on June 9 its writedown should Arcandor fail may be less than $68 million.

The company “definitely went through a number of problems” since 2008, with more than 20 retailers having gone bankrupt, Rockowitz said.

“I can’t say I don’t expect another bankruptcy -- it’s hard to tell -- but I would say a lot of weaker customers and retailers have gone bankrupt already,” Rockowitz said. “The weaker are getting weeded out right now.”

To contact the reporter on this story: Wing-Gar Cheng in Hong Kong at [email protected]
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Re: Li & Fung 0494

Postby winston » Fri Sep 11, 2009 10:09 am

DJ MARKET TALK: Li & Fung Off 2.5% Pre-Mkt;Temasek Stake Eyed-UBS

0945 [Dow Jones] Li & Fung (0494.HK) down 2.5% at HK$29.45 at pre-open; stock set to face profit-taking after gaining 11.9% over past 3 sessions amid improving outlook toward exporters and U.S. retailers.

UBS notes Li & Fung +32% vs end-July level, while HSI +2.4% during same period. "We believe uncertainty mounts over whether Temasek will sell its stake and profit-taking will impact near-term momentum, although our bullish fundamental view that L&F should benefit from a U.S. recovery in early-2010 has not changed."

Notes, 1-year lockup period for Temasek will expire Sep. 18 for 168 million shares, or 4.6% of share base. Expects near-term pullback; keeps at Buy, target at HK$32.00.

Contact us in Hong Kong. 852 2802 7002; [email protected]
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Re: Li & Fung 0494

Postby winston » Wed Sep 23, 2009 2:37 pm

Not vested.

DJ MARKET TALK: GS Raises Li & Fung Target To HK$38 From HK$29

1410 [Dow Jones] STOCK CALL: Goldman Sachs raises Li & Fung (0494.HK) target price to HK$38.00 from HK$29.00 based on its mid-cycle P/E of 24X vs previous 18X. Says while market consensus has turned more positive, house still sees upside from earnings and potential catalysts from M&A.

( PE 24 for slow growth ? )

Adds, longer term, views L&F's ability to gain market share as still best in coverage universe. Fine-tunes EPS forecasts, cuts 2009 EPS forecast by 2%, keeps 2010 EPS forecast unchanged, raises 2011 EPS by 2% due to still weak trade figures in 2H09, but stronger margins by 2011. Add stock to Conviction Buy list.

Source: Dow Jones Newswire
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Re: Li & Fung 0494

Postby winston » Mon Oct 12, 2009 8:39 am

Li & Fung Seeks Producers With More Than $100 Million in Sales
By Lauren Coleman-Lochner

Oct. 12 (Bloomberg) -- Li & Fung Ltd., the biggest supplier of clothes and toys to Wal-Mart Stores Inc. and Target Corp., said it’s considering acquisitions of several U.S. companies with hundreds of millions of dollars in annual sales.

“We’ve never seen so many great opportunities,” President Bruce Rockowitz said in an Oct. 9 interview in New York. “It’s almost unprecedented.”

The company has a $1 billion acquisition fund, and is eyeing “multi-hundred-million-dollar-sales companies” in the U.S., he said. Li & Fung may make “a series of acquisitions” within the coming months, and is also looking at companies in Europe and in Hong Kong, he said.

Li & Fung, founded in China in 1906 near the end of the Qing Dynasty, is accelerating efforts to buy makers of clothing, cosmetics, home products, accessories and shoes at a time when retailers are stepping up reordering to meet growing demand. The company is looking for wholesalers, not merchants, Rockowitz said.

Since September, there’s been a “marked difference” at retailers, said Rockowitz.

“People are restocking their closets now because they haven’t bought in a long time,” the executive said. Kohl’s Corp. has had “a tremendous amount of reorders” over the last two months, he said.

Sales at U.S. chains open at least a year rose 1.1 percent in September, the first increase in 13 months, as results at American Eagle Outfitters Inc. and Kohl’s topped analysts’ estimates and discounts drew shoppers back to stores, according to Swampscott, Massachusetts-based Retail Metrics Inc.

Closely Held Targets

Li & Fung would probably buy closely held companies as it has in the past, because it likes to keep management in place, said Marc Cooper, head of the retail practice at New York-based investment bank Peter J. Solomon Co.

The supplier has been “conservative” about the prices it pays for companies, he said. Because of a dearth of deals, valuations are difficult to determine, Cooper said.

“Other than distressed transactions, there’s been no mergers and acquisitions in the retail and consumer space,” he said.

Li & Fung’s acquisitions include New York-based handbag importer Van Zeeland Inc., announced last year. Van Zeeland brings in goods to sell in U.S. department stores including Macy’s Inc.

The company may announce some acquisitions by year-end, Rockowitz said Sept. 21.

The Hong Kong-listed company has also signed new outsourcing contracts this year.

Li & Fung in August said it would provide almost all apparel to Talbots Inc., a U.S. women’s clothing chain with more than 580 stores in the U.S. and Canada. Li & Fung expects to generate as much as $400 million in volume with the Hingham, Massachusetts-based retailer this year.

In April, Li & Fung completed an $83 million agreement to buy the sourcing business of Liz Claiborne Inc., whose brands in include Kate Spade and Juicy Couture. The deal may boost sales by $1 billion, according to the company.

http://www.bloomberg.com/apps/news?pid= ... BlF4cfmGpc
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Re: Li & Fung 0494

Postby winston » Thu Oct 15, 2009 11:15 am

Not vested.

DJ MARKET TALK: Li & Fung +1.4%; DBS Tips To "Make Major Move"

1033 [Dow Jones] Li & Fung (0494.HK) +1.4% at HK$33.70 after earlier touching fresh 52-week high of HK$34.00; stock rising for 7th session out of eight, for cumulative gains of 18.7%, as is prime recovery play, especially sensitive to positive U.S. economic news.

Fundamentally, slew of acquisitions made during market trough now expected to bear fruit, more likely to come. DBS Vickers says "crisis brings opportunities;" after raising over HK$2 billion from share placement in May 2009, tips sourcing giant expected to "make major move" in acquisitions, as current difficult retail markets has offered more acquisition opportunities.

House raises Li & Fung target to HK$36.80 from HK$30.00, now pegged on 1X FY10 PEG, keeps Buy call.

Source: Dow Jones Newswire
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