Hong Kong's largest listed trading firm, Li & Fung, will see its fledgling brand business break even this year, the company said after its annual general meeting yesterday. Li & Fung's brand business last year incurred a net loss of $10 million, according to Bruce Rockowitz, the group's president for trading. 'The branded business will break even this year, or maybe make a small profit,' Mr Rockowitz said. Group managing director William Fung Kwok-lun said: 'Our brand business is now in the growth stage. Next year it will start to earn money.' The company's first-quarter results were within projections and orders received had increased over last year, said Mr Fung, without giving numbers. Revenue growth would be challenged by lower prices, especially in textiles, but this would be offset by increased sales volumes, he added. Over the next three years, the brand business would account for 10 per cent of Li & Fung's turnover and 15 per cent of earnings before interest and tax, said Core Pacific-Yamaichi analyst Bonnie Lai. Li & Fung's three-year plan targets annual revenues of US$10 billion. Li & Fung began acquiring licences to distribute or manufacture brands last year. It is already shipping brands such as Disney, Levi Strauss and Royal Velvet. Ms Lai warned that the brand business was riskier than supply chain management, which still constitutes most of Li & Fung's business. While supply chain management involved sourcing products for customers, the brand business required the company to handle design, manufacture and organise the logistics while still seeking customers, she said. Core Pacific-Yamaichi forecasts Li & Fung's turnover at $55.5 billion and net earnings of $1.8 billion this year.