Value Partners, a fund house with a reputation of shunning large-caps and buying smaller firms with genuine growth prospects, has added another small-cap fabric maker Huafeng Environmental Protection Textile to its portfolio. Cai Zhenrong, the controlling shareholder of Huafeng, placed 38.8 million existing shares, or 5.94 per cent of the company's issued share capital, at a consideration of $24.56 million or 63.3 cents per share to Value Partners, a filing made to the Hong Kong Exchanges and Clearing said on Monday. The placing price represented a discount of about 15.6 per cent to Friday's close of 75 cents. Despite the discount, the counter hit its record high of 86 cents yesterday. Fund managers and analysts said they were not surprised, citing strong support from liquidity. They forecast small caps and China stocks would deliver solid growth and returns in the second half. 'Notwithstanding the rally [in the first half], small caps and China stocks are still offering relatively better value in terms of higher growth, lower price to book and higher return on equity than the Hang Seng Index's big caps on a 12-month view,' said Kingston Lee, head of Hong Kong and China research at ING Financial Markets. He estimated that mid- and small-caps would trade at a forward price to earnings ratio of 10.6 times with a 26.4 per cent growth in earnings while large-caps would have a multiple of 14 times with earnings growth of 4.4 per cent. Fujian-based Huafeng made a net profit of $78 million in the year to September and expected sales this year to rise by 30 per cent. The stock is estimated to be trading at five times forward earnings.