About a year ago G..K. Goh maintained its 'buy' recommendation on Sun Hing Vision after the eyewear maker reported a 4.3 per cent net profit increase to $92.4 million for the year to the end of March last year.
Turnover rose 9 per cent in 2003 to $514 million. The broker said Sun Hing had consistently delivered earnings growth in the past five years. Its target price for the stock was $4.48 based on a 10 times one-year-forward price/earnings. The counter was trading at $3.70 a year ago.
As European manufacturers faced rising costs and a shrinking labour pool, the broker expected more outsourcing to be directed to Sun Hing. It projected a two-year compound annual growth rate for original design manufacturing sales of 12 per cent. Sun Hing was expected to secure more licensed brands to strengthen its portfolio and, given the positive response to a new Levi's eyewear collection, the group would be extending its distribution in Asia.
Double-digit growth for licensing sales in the next three years was forecast. A two-year earnings per share compound annual growth rate of 18 per cent was expected.
This month Sun Hing Vision Group Holdings said its net profit fell 23 per cent to $70.84 million for the year to March. Turnover rose 14 per cent to $585.39 million. The counter closed on Friday at $2.65.
