China Dongxiang 3818

[winston]

DJ MARKET TALK: BOCI Tips Dongxiang As Top China Sportswear Stock

1229 [Dow Jones] BOCI says China sportswear makers had fruitful 2008 on high enthusiasm of distributors amid high expectations for post-Olympic sales; unfortunately, passion for Olympics didn't translate into strong sales.

Expect sales growth of China sportswear market to slow to 15% in next 2 years due to combined impact of unfavorable macroeconomic environment, industry cycle; holds Neutral view on sector.

Tips top Buy as China Dongxiang (3818.HK) as principal brand Kappa positioned as fashion sportswear, enabling it to avoid stiff competition with professional sportswear products.

Dongxiang down 0.4% at HK$2.48. Target Price is HK$2.82,

[winston]

DJ MARKET TALK:UOBKH Tips 45% Rise In Dongxiang's 2008 Net Profit

1002 [Dow Jones] STOCK CALL: UOB KayHian tips China Dongxiang (3818.HK) to report 2008 net profit +45% on-year at CNY1 billion, driven by 18% same-store sales growth and addition of more than 850 outlets (+44%); results due March 25.

House keeps 2009, 2010 net profit growth forecast of 13%, 18%, respectively, based on assumptions of 3% of same-store-sales growth and addition of 650 outlets per annum. But notes, margin risk remains greatest uncertainty for sportswear companies as distributors may need to cut prices to clear inventories if sales slow sharply as result of deterioration of economy.

Keeps at Buy, target HK$3.30. Stock +0.4% at HK$2.59

[winston]

PE 14; Frank Gong of JPM likes this stock on Bloomberg now. He's quite a highly rated Analyst.

Whenever I go to any of the malls, I noticed that a lot of younger kids are wearing Kappa.

Not vested.

[ichew]

just came back from a holiday in beijing
and yes saw a number of youths wearing kappa
one thing i regret not doing is comparing the prices betw kappa, li ning, nike, adidas etc

my frens n i compared the prices of nike, adidas in beijing vs spore and concluded that it is actually a few dollars cheaper to buy in spore
of cos nothing beats buyin the fake ones la
i rem li ning is a few dollars cheaper than nike adidas

was reading in forbes asia abt how china dongxiang revived this dying brand in china
and analysts r now wondering which brand (eg le coq sportif, fred perry etc) will be bgt by chinese coys to be revived in china
stay tuned

[winston]

Sportswear firm treads softly by Mandy Lo, The Standard in Beijing

Spurred by improving sales, sportswear firm China Dongxiang (3818) - owner of the Kappa brand in the mainland, Macau and Japan - has expressed cautious optimism about China's retail market this year.

"Orders growth has moderated substantially from past years, but we think a 20 percent growth is reasonable, chief executive Dennis Qin Dazhong said.

Orders for delivery in the fourth quarter leaped 21 percent year-on-year, a sharp hike from the 8 percent growth in the third quarter.

The average selling price climbed 1 to 2 percent year-on-year, said chief financial officer Terence Wong Chi- keung. Same-store sales started to rebound in April and a moderate recovery has been expected from then on, said Wong, adding the real economy will recover gradually.

In spite of their large savings, Chinese consumers need time to regain confidence after the financial crisis, he said.

Year on year, same-store sales grew by an average 6 percent in the first quarter. But excessive inventory may continue till the end of the year as the market had over-estimated the impact of the Beijing Olympics on consumption, said Qin. "Our distributors are still profitable but if they face any operating crisis we may adjust the selling price."

Dongxiang plans to expand its distribution network in the mainland's second- and third-tier cities, as first-tier locations such as Beijing and Shanghai face a glut in sportswear stores.

[winston]

DJ MARKET TALK: Dongxiang Dn 1.9% Post-Placement; ICBCI Keeps Buy

1114 [Dow Jones] Dongxiang (3818.HK) down 1.9% at HK$5.21 on news chairman Chen Yihong and other holders selling total of 170 million existing shares at HK$5.02 each to cash in HK$853 million; placement price represents 5.5% discount to Tuesday's close of HK$5.31.

Still, traders say stock's downside relatively mild as placement size represents only 3% of total outstanding shares. "Though we expect short-term share price volatility, there is no fundamental change," says ICBC International.

House still likes its brand differentiation, growth recovery since 2Q09. Keeps stock at Buy, target at HK$8.00, equal to 22X FY10 P/E

[winston]

Not vested. This is starting to become a very good brand. However, competition is very tough ...


DJ MARKET TALK:Yuanta "Impressed" By Dongxiang Trade Show Results

1510 [Dow Jones] STOCK CALL: China Dongxiang's (3818.HK) 2Q10 trade show results underscore growth theme, Yuanta says, adding "impressed" by 22% on-year order sales growth, with apparel +26% on-year, footwear +11.5% on-year.

Estimates combined with 1Q10 sales fair's +15.8% on-year order sales growth, 1H10 order sales should be in line with house's expectation of 19.2% on-year growth.

"We believe channel stuffing has already been priced in and that the economic recovery has finally brought same-store-sales growth and reduced restocking pressure." Adds, management indicates seeking quality brand names to acquire, has CNY6.4 billion cash on hand. Keeps positive outlook on company; rates at Buy, target HK$6.10.

Source: Dow Jones Newswire

[winston]

Not vested. However, I do see a lot of people wearing Kappa in China. Not sure whether they are the real Mc Coy or genuine fakes


From UOBKH:-

Valuation/Recommendation

CDX is trading at 16.6x 2010F PE, compared with 21x for Li Ning and 19x for Anta. Subtracting the HK$1.20/share net cash from share price, the stock is only trading at 15x 2010F PE.

Based on 1x PEG and net profit CAGR of 20%, we have a target 2010F PE of 20x, or a target price of HK$7.20. Maintain BUY.

[winston]

Not vested.

DJ MARKET TALK: BoA-ML Cuts China Dongxiang To Underperform

1014 [Dow Jones] STOCK CALL: Bank of America-Merrill Lynch downgrades China Dongxiang (3818.HK) to Underperform from Buy as risk reward looks unfavorable from standpoint of revenue momentum, margins, inventory and potential M&A.

Cuts target to HK$5.50 from HK$6.15 after lowering 2010-11 earnings forecasts by 6-7%. "Given Dongxiang's high price positioning, we think its expansion into Tier-2/3 cities could put pressure on both further ASP increases and growth in sales/average store." Stock off 6.3% at HK$5.40.

Source: Dow Jones Newswire

[winston]

Not vested. From Dr. Check, The Standard HK:-

Goldman Sachs likes China Dongxiang (3818). It sells sports apparel and footwear in the mainland.

Goldman's target price is HK$7.20 or 20 times 2010 expected earnings. It thinks Dongxiang's Kappa brand can top the market. Yesterday, the stock closed at HK$5.57 or 19 times its historical earnings - not too far from its 52-week high of HK$6.07.