Buy Esprit Holdings South China Securities upgraded its earnings expectations for the clothing retailer by 6.4 per cent for this year and 7.9 per cent for next year due to better than expected results for last year and upbeat guidance from management. Analyst Anthony Teoh also raised his target price for the stock from HK$19.10 to $19.90, which will put Esprit on 19.8 times this year's expected earnings. Esprit was now expanding in the United States, leveraging on its successful model in Germany, he said. Hold Legend Group Merrill Lynch analysts Tien Yu Sieh and Min Lu reiterated their 'neutral' rating on the mainland computer manufacturer 'given relatively demanding valuations'. Legend reports its third-quarter results next Wednesday, and Merrill forecasts net profit to edge up 0.03 per cent year on year to $312 million, with an earnings per share of 4.2 cents. Revenue is expected to rise 5.9 per cent to $5.5 billion. Sales of personal computers to companies are expected to be strong in the third quarter but consumer sales should 'remain dull'. Merrill estimates that in the third quarter, Legend shipped 655,000 corporate PCs, up 42 per cent year on year, and 216,000 consumer PCs, a fall of 18 per cent. Sell TCL SHK Financial Group maintained its 'sell' recommendation after the mobile-phone manufacturer slashed the price of an old handset model by 20 per cent to $1,530 last week in a bid to regain market share. 'The cut was even bigger than our expectation,' said analysts Florence Cheung and Niki Chi. 'This indicates fierce competition within the industry [and] we expect the competition within the handset market to intensify during the Lunar New Year holidays as other competitors may join the price war.' SHK Financial has cut its profit forecast for this financial year by about 25 per cent to $954 million. Local brands including TCL have to overcome the problem of being perceived as inferior to overseas brands, according to the brokerage. Foreign brands also have better after-sales service, which makes them more attractive.