The soaring first-quarter profit and turnover of Truly International Holdings, which makes and sells liquid crystal displays and electronic products including calculators, pagers, MP3 players and components, has prompted SBI E2-Capital to upgrade its recommendation on the stock from 'buy' to 'strong buy'. This month Truly announced that its earnings in the first quarter were 344 per cent higher at HK$115.9 million and that turnover rose 227 per cent to $682.3 million over the period last year. It plans to increase its capacity to turn out colour display modules as mainland mobile-phone makers shift from monochrome handsets to 2.5-generation models. The company made 20,000 to 30,000 colour display units a day and aimed to increase this to 100,000 by the end of next year. It was spending US$100,000 on a second production line. Gross margin improved to 28.8 per cent for the quarter, up from 28.4 per cent in the fourth quarter last year. SBI has revised up its earnings forecast by 10 per cent for 2004 and 2005. Its target price has been raised to $20.60 from $18.60. Even stronger growth is expected in the second quarter, with sales reaching $900 million. This is the sixth time that SBI has upgraded Truly earnings since starting coverage last September. The counter closed at $10.20 on Friday.