Yue Yuen Industrial Sun Hung Kai Research has downgraded its rating on Yue Yuen from 'buy' to 'hold' on the back of what the brokerage sees as the counter's limited potential upside. The athletic and casual footwear supplier expects its order volume for this quarter will surge by 25 per cent. Sun Hung Kai Research, however, said it had not revised up its full-year earnings forecasts. 'We are concerned that the Iraq war, the lacklustre stock market and the uncertain global economic outlook may offset part of the outstanding performance,' it said. Sun Hung Kai Research projects Yue Yuen's earnings will rise to HK$1.33 a share this year and $1.45 next year. The brokerage has a price target of $17.40.
Van Shung Chong Tung Tai Securities has assigned a 'buy' recommendation on Van Shung Chong saying the steel products maker will see healthy earnings growth this year. The brokerage said more production bases would be relocated to China and demand for high quality steel processing would increase. Tung Tai said: 'Van Shung Chong is heading in the right direction to capitalise on the vast opportunity in China.' The brokerage projects Van Shung Chong's earnings will rise to 19.2 cents a share this year and 22 cents next year. It has a target price of $1.54.
Chitaly Holdings Kingston Securities has initiated its coverage on Chitaly with a 'buy' recommendation citing the furniture producer's high dividend yield and impressive return on equity. However, the brokerage forecasts that gross margins will fall 3 per cent in light of the deflationary environment in China. It projects Chitaly's earnings will be 19 cents a share this year and 21 cents next year. Kingston has set a target price of $1.25 for the firm.
