Brilliance China Automotive Holdings Merrill Lynch analyst Grace Mak has upgraded her earnings forecasts for the carmaker by 9 per cent for this year and next year, but has kept a 'neutral' recommendation on its stock. Brilliance's aim to expand its distribution network - from 60 shops at the end of last year to about 100 in a year's time - should sustain the strong sales momentum of the carmaker's Zhong Hua sedan car, Ms Mak said. However, she expects earnings growth to be dragged by the starting costs associated with Brilliance's joint venture with BMW. Should the bitter legal battle with its former chairman Yang Rong settle in favour of the carmaker, its stock was expected to gain ground, Ms Mak said. Earnings per share are expected to rise from 18.7 Hong Kong cents for last year to 20.5 cents this year.

Li & Fung DBS Vickers Securities has trimmed its earnings forecasts for the garment and consumer goods supply-chain manager by between 7 per cent and 8 per cent for last year and this year, after scaling down its sales assumptions due to economic uncertainty and a looming war. But with a healthy order book, a strong cash position and sound management, DBS Vickers believes Li & Fung shares deserve a premium over the market and are still a good choice. Analyst Alice Hui said the stock traded on 27.1 times 2002 earnings and 16.4 times this year's earnings, which she believes is not demanding against its growth potential. But she also warned that the stock has underperformed the market over the past three months, and that worries over Iraq would continue to dampen sentiment.

Giordano International SHK Financial Group analyst Carrie Chan has cut the clothing retailer's earnings forecasts by 5.8 per cent and 4.4 per cent last year and this year, respectively. An operating loss in Japan and a $10 million write-off from terminating its German operations eroded Giordano's earnings last year. With dim economic forecasts, weak consumer sentiment and halting growth momentum in China this year - due to drawn-out discussions with joint-venture partner CRE - Ms Chan said the stock was fully priced, given that it traded at 10 times 2002 earnings and nine times 2003 earnings. She expected the stock to continue to be derated and reiterated her 'sell' recommendation, revising her target price to $2.70 from $3.10.