Disclaimer

Disclaimer:-Please note that all such analysis is provided by way of information only. All of the information was and should be taken as having been prepared for the purpose of reference only and that none were made with regard to any specific investment objective, financial situation or the needs of any particular person who may receive the analysis. Any recommendation or advice that may be expressed in or inferred from such analysis therefore does not take into account and may not be suitable for your investment objective.

Monday, August 25, 2008

China HongX Research Report

by DBS Vickers Securities (25 Aug)

All of China Hongxing's peers such as Li Ning, Anta and Dongxiang have seen significant valuation de-rating over the last six months, along with the declining Shanghai market.

China Hongxing itself has not been spared, and has seen its share price drop by over 40% in the last three months, despite delivering good results.

We believe current valuations for China Hongxing are at an attractive level for investors to accumulate for a leading China domestic sports. At less than 10x FY2008 and just over 7x FY2009 PER, China Hongxing is trading at less than half that of Li Ning, currently at about 25x FY2008 and 19x FY2009 earnings.

Maintaining our 20% discount to HK-listed peers, which are currently trading at an average of 13.5x FY2009 earnings, we adjust our target to 11x FY2009 PER for China Hongxing.

-Research Report by DBS Vickers Securities (25 Aug)
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