After the recent rally in industrial plays, investors turn to export-oriented stocks Orient Power Holdings soared 22.03 per cent to 72 cents yesterday, with investors turning their attention to small-caps after the recent run-up in large-cap industrial stocks. Shares in the maker of electronic audio and visual products have climbed 46.93 per cent over the past month. 'The market is now focused on the export-oriented stocks with price-to-earnings multiples of less than 10,' KGI Asia director Ben Kwong Man-bun said. Orient Power trades at about four times expected earnings. This compares with a multiple of eight for rival Ngai Lik and six for Alco. But Mr Kwong said investors should note that the jump in the company's shares had been caused by short-term speculative trading - meaning the rally could be short-lived. Also, there is a possibility of share placement by Orient Power and the company's gearing is high. 'Its long-term debt is about 45 per cent of shareholder equity,' Mr Kwong said. 'It is possible the company may raise funds to reduce its debt.' The company is organising investment conferences and roadshows for fund managers with the help of SBI-E2-Capital. 'The stock is rather illiquid,' said Kenny Tang Sing-hing, associate director at Tung Tai Securities. 'A share placement - either new or old shares - would be a handy means to meet the likely demand from fund managers.' But when it came to fundamentals, the company had shown unsteady historical earnings growth, Mr Tang said. Net profit fell 30.49 per cent to $48.1 million in 2001 but rose 14.96 per cent to $55.3 million last year. In contrast, rival Ngai Lik has recorded a continuous rise in net profit. Both companies' core business is consumer electronic products manufacturing for overseas retail giants in Europe and the United States. Ngai Lik has an operating margin of 8.48 per cent, compared with 2.31 per cent for Orient Power. Despite this, some analysts remain upbeat over the prospects for Orient Power's outsourcing business. SBI-E2-Capital notes that General Motor has placed orders with the firm for car-audio systems.