Li & Fung 0494

Re: Li & Fung 0494

Postby winston » Fri Sep 14, 2012 11:48 am

Last Update as at 14 Sep 11:39 (HKT)
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DJ MARKET TALK: Macquarie Tips 'Low-Quality' Li & Fung Rally

1118 [Dow Jones] STOCK CALL: Macquarie says in the near term "we think Li & Fung (0494.HK) could see a low-quality share price rally" driven by softening raw material prices which depressed 1H12 earnings.

"However, we think Li & Fung will use this as an opportunity to potentially raise equity," as the company tries to de-lever its balance sheet to fund large acquisitions and justify its P/E multiple.

While it has factored-in benefit from the lower raw material costs, the house also put in the lower organic growth rate and the equity dilution from new acquisitions, resulting in a 12% lower target price to HK$11.00, implying a 13.5X forward P/E; it keeps the stock at Underperform.


Source: Dow Jones & Company, Inc.
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Re: Li & Fung 0494

Postby winston » Fri Sep 21, 2012 7:36 am

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Wal-Mart Scales Back Deal With Li & Fung

HONG KONG—Wal-Mart Stores Inc. has canceled much of a deal in which Hong Kong's Li & Fung Ltd. would supply goods for the U.S.-based retailer's overseas stores, according to people close to the companies, as Wal-Mart moves to buy more of its products directly from factories.

The move dealt another blow to Li & Fung, which serves as a buying agent for a variety of goods, including toys and clothes, for retailers such as Wal-Mart and Target Corp. Li & Fung's core operating profit fell 22% in the first half, prompting analysts to cut their ratings on the company's stock.

Source: http://online.wsj.com/article/SB1000087 ... lenews_wsj
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Re: Li & Fung 0494

Postby winston » Fri Sep 21, 2012 7:42 am

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Li & Fung inks design deal with Wal-Mart

Li & Fung (0494), the largest supplier of clothes and toys to retailers, said it has signed a new agreement to provide design and replenishment services to Wal-Mart Stores.

The agreement is part of a new agency contract that will supersede a previous one signed in January 2010, Li & Fung said in a statement to Hong the Kong stock exchange yesterday.

"This is positive not only for revenue streams but also for margins, as distribution is traditionally a higher- margin business, because Li & Fung, which had only done trading operations for Wal-Mart, can now also do product design and development- related distribution," said Vineet Sharma, an analyst at Barclays in Hong Kong.

The agreement, which the trading company said will last for five years, with an option to extend for another two years, also shows the deepening relationship between the two businesses, Sharma said.

Hong Kong-based Li & Fung will continue to be a primary supplier for Sams Club in the US, through its Direct Sourcing Group subsidiary, and provide buying-agency services to Wal-Mart's US operations and in some of its international markets.


Source: BLOOMBERG
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Re: Li & Fung 0494

Postby winston » Fri Sep 21, 2012 10:50 am

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DJ MARKET TALK: Li & Fung Off 2.1%; New Deal Slightly Positive-JPM

1019 [Dow Jones] Li & Fung (0494.HK) falls 2.1% to HK$12.26 and is the worst-performing blue chip, due to concerns of lower business volume from Wal-Mart (WMT), after WSJ reported that Wal-Mart has canceled much of a deal in which Li & Fung would supply goods for the U.S.-based retailer's overseas stores.

Still, JPMorgan believes the new agreement with Wal-Mart is "marginally positive" as there are no major changes to the buying agency relationship itself between the new and old agreement, with the only important change is the focus of DSG's (Direct Sourcing Group, a Li & Fung subsidiary) expertise on categories where Wal-Mart really needs Li & Fung's expertise.

Hence, JPM says the new agreement removes an uncertainty and there is still some mid-term commitment from both parties as the agreement will run for at least five years.

Still, the house adds that it understands that the new buying-agency relationship is likely to focus on select categories, so it could limit the upside risk to the volumes. Overall, JPM keeps Li & Fung at Neutral.


Source: Dow Jones & Company, Inc.
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Re: Li & Fung 0494

Postby winston » Mon Sep 24, 2012 10:26 am

DJ MARKET TALK: Li & Fung Off 1.6%; HSBC Stays Overweight

1008 [Dow Jones] Li & Fung (0494.HK) is down 1.6% at HK$12.00, on top of its 2.6% decline Friday owing to concerns over lower business volume from Wal-Mart, after the sourcing firm announces that its subsidiary, Direct Sourcing Group, has entered into a new sourcing agreement with Wal-Mart, which ruled out the possibility of Wal-Mart purchasing DSG.

Still, HSBC thinks this development removes an overhang; the house explains both companies wanted a safety net for corporate governance reasons in the beginning of their relationshp, and after successful collaboration for more than two years in DSG, "we reckon such a call option is not necessary any more and it would be beneficial for Li & Fung to exit this contractual term, as it removes a major overhang in 2016."

HSBC keeps Li & Fung at Overweight with an unchanged target price of HK$17.00, based on 17X FY13 P/E.


Source: Dow Jones & Company, Inc.
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Re: Li & Fung 0494

Postby winston » Mon Oct 08, 2012 11:35 am

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LI & FUNG (00494.HK) reiterated Overweight

According to media reports, LI & FUNG (00494.HK) is interested in acquiring New York-based Zara procurement agent, Synergies Worldwide (SW).

SW was established in 1987, providing apparel, home textiles and fashion accessories sourcing agent services. The major clients include Zara, Tommy Hilfiger Boys, and Nautica.

According to its website, SW is managing more than US$300 million in international trade for its customers. Using the above figure for reference, HSBC estimates such will only account for 1.44% of the annual income of Li & Fung next year.

However, the potential deal is positive as the acquisition will help its core trading business, especially SW has reputable customers such as Zara. Although the size of the transaction is still unknown, the Bank stressed that the Group's net gearing ratio is estimated to be 64%. It may use its line of credit to cope with this transaction.

The Stock Exchange data show that the Fung family repurchased shares for several times. The Bank said that although the total repurchase accounted for only 0.35% of the issued shares of the Company, it shows good gesture for the positive views held by the controlling shareholders. The Bank reiterated Overweight rating, with target remained at $17.
AAStocks Financial News
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Re: Li & Fung 0494

Postby winston » Tue Nov 13, 2012 2:33 pm

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LI & FUNG (00494.HK) upgraded to Buy, with TP set at $15.1 by Deutsche, as shr placement threat fades

Deutsche Bank deems the threat of LI & FUNG (00494.HK) putting forwarding a share placement scheme fades as the latter decided to issue perpetual bonds to obtain funds.

LI & FUNG becomes a more attractive stock after falling on disappointing first-half results, said the broker.

LI & FUNG was upgraded to Buy from Hold with target slightly lifted to $15.1 from $14.95.

Source: AAStocks Financial News
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Re: Li & Fung 0494

Postby winston » Sun Jan 13, 2013 8:44 pm

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LI & FUNG (00494.HK) expects FY core pft to drop 40%
2013-01-11

LI & FUNG (00494.HK) issued profit warning stating that the annual net profit in 2012, will not exceed that in 2011, when net profit of $4.27 billion was recorded.

The Company stated the core operating profit is expected to be lower by approximately 40% (compared to the corresponding period in 2011).


Sourcee: AAStocks Financial News
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Re: Li & Fung 0494

Postby winston » Thu Feb 07, 2013 5:12 pm

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MFS raises stake in LI & FUNG (00494.HK) to 6.09%

Massachusetts Financial Services (MFS) on 1 January increased holding in LI & FUNG (00494.HK) by 9.378 million shares for over $100 million, data from the HKEX showed.

MFS is currently holding 6.09% stake in LI & FUNG.

LI & FUNG (00494.HK) last declined 4% to $10.12 today.


Source: AAStocks Financial News
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Re: Li & Fung 0494

Postby winston » Wed Jul 03, 2013 5:14 am

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LI & FUNG (00494.HK) upgraded to Buy, TP hiked to $13.5 by Citi
2013-07-02

LI & FUNG (00494.HK) is now trading at 13.1x 2014e P/E ratio, with 19.5% 2012-15 EPS CAGR and 4.8% dividend yield, Citi said in a report.

LI & FUNG is upgraded from Neutral to Buy with target price hiked from $11.7 to $13.5.


Source: AAStocks Financial News
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