We spoke to management recently regarding its growth strategy
post-Olympics. Hongxing plans to continue its retail
network expansion and A&P to raise brand visibility as it believes that
China's sporting market will continue to
grow, buttressed by other sporting events like the 16th Asian Games in
2010 and rising sports participation. In
addition, Hongxing has secured indicative orders worth Rm1bn during its
March trade fair. We have made no changes to
our earnings estimates and maintain our target price of S$0.86, based
on 16.5x CY09 earnings, or a 20% premium to
average valuations for the sports shoe sector. Reiterate Outperform on
the back of robust industry prospects.
Quick Takes
* Bukit Sembawang Estates (S$8.99) - Airview Towers falls
through
* Factory Output - All clusters contributed to February's
growth
News of the Day
* Rising tide of foreigners snapping up Singapore property
* Tuas Power plans Singapore's first coal-fired plant-paper
* CCT to buy 1 George Street for S$1.165 billion
* Maybank buys Temasek stake in Indonesian bank
* State Bank of India gets Singapore full bank license
* LMIR Trust makes maiden buy
Technical Trading Ideas
* Wheelock Properties (S)
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