PUBLISHED : Sunday, 01 May, 2005, 12:00am
UPDATED : Sunday, 01 May, 2005, 12:00am

About a year ago GK Goh said toymaker Dream International was expected to rebound sharply as sales increased and costs fell when a new plant in Vietnam began production. Dream had just reported a net profit of $121 million for 2003, up 6.6 per cent year on year but slightly below expectations, due to Sars and the Iraq war.

The broker expected a compound annual sales growth rate of 15.5 per cent for Dream from last year to 2006. The rebound would come mainly from a large order from a United States marketing company, an increase in sales to Wal-Mart, a new tricycle joint venture in Shanghai, a rise in turnover thanks to a full contribution from a newly acquired marketing firm and the search for sales in Japan.

Goh maintained its 'buy' recommendation, and projected a fair price of $2.98. The counter was trading at $2.225 a year ago.

This month Dream reported that net profit tumbled 56 per cent last year on high raw material prices, labour shortages and a bankruptcy at one of its main customers in the US.

Earnings fell to $52.92 million, although revenue rose 24.3 per cent to $1.15 billion.

The counter closed at $1.17 on Friday.