Li & Fung becomes buy
LI & FUNG is principally engaged in the export of consumer products, including textiles and fashion accessories in addition to plastics and handicrafts.
Merrill Lynch upgraded the stock's intermediate recommendation from neutral to buy as the brokerage upgraded its earnings forecasts, putting it at the bullish end of the broker's range.
Earnings per share were upgraded by 2 per cent to 86 cents for this year and by 18 per cent to $1.11 for next.
New accounts won by the company in the past six months are expected to net $3.5 billion in revenues next year.
This year the company has signed new accounts with Avon, Reebok Apparel and Tesco.
Merrill forecasts revenues of $21.8 billion in 2001, representing a 52 per cent increase over last year's figure.
The company has also introduced a financing programme for some of its factories which is expected to increase from 3.2 per cent in last year to 4.4 per cent in 2001.
Key markets for the company such as the US and Britain are still strong, which should boost the company.