Upgrades and downgrades

SELL

Giordano International Merrill Lynch has reiterated its 'sell' rating on Giordano in light of the casual wear retailer's lack of long-term growth drivers and further downside earnings risk. Giordano reported a 66 per cent year-on-year decrease in net profit to $63 million for the first half, which was 31 per cent below the forecast of $92 million by analysts Jeanine Angell and David Errington. 'We are not convinced sales and earnings will quickly recover given that Giordano seems to be losing market share in most major markets,' the analysts said. They have lowered their earnings forecasts by 13.5 per cent to 15 cents a share this year and 7 per cent to 19 cents next year. They have a price target of $2.05.

BUY

Guangshen Railway HSBC Securities has upgraded its rating on Guangshen Railway from 'reduce' to 'add', saying further easing of travel restrictions should boost earnings of the only railway operator between Guangzhou and Hong Kong. The Chinese government has allowed residents from Beijing, Shanghai, Guangzhou, Zhuhai and Shenzhen to travel to Hong Kong and Macau on an individual basis from September 1. Analyst Maurien Yau said: 'Guangshen is well placed to benefit from the recent relaxation on visa issuance for private travellers from China.' She has raised the earnings estimates for the company by 10 per cent for this year and an average of 26 per cent for next year and 2005. Trading at 12 times forward earnings, with a 5.5 per cent dividend yield, the shares were inexpensive, said Ms Yau, who has a target of $2 on the stock.