Shoe Stocks Are Better Than Big Ones This Year.

Whether China reconsiders exchange rate reform, or the mainland wage increase and inflation signals, domestic demand shares will undoubtedly become a beneficiary.

Shoe stocks are better than big ones this year.

Looking back to the present year, the share price performance of the mainland footwear industry including BELLE (1880), Daphne (210), Li XinDa (738) and nine Hing Holdings (1836) is better than that of the big market, up 21.19%, 33.12%, 54.70% and 6.53% respectively.

The Hang Seng Index fell 4.16% during the same period.

Looking forward to the future investment prospects, the Bank of Hong Kong International gave nine Hing Holdings' long term buy 'rating, Goldman Sachs gave BELLE a "buy" rating.

According to the bank's international report, the export demand of the footwear industry in the mainland is gradually recovering, but the long-term growth is slowing down.

In the upstream manufacturing and processing enterprises, the old mode of "big price low" is no longer suitable for the long-term development of enterprises. Strengthening the R & D capability, enhancing the added value and brand value of the products is the way to break through.

At the same time, actively building a strong brand and establishing a perfect retail network will be the opening stone for the downstream industry.

The bank believes that Daphne (210) has great potential in the three tier cities and rural low-end market, and has a mature market share and a relatively high growth rate in the future.

Nine, earnings per share grew fast.

As for upstream enterprises, nine Hing Holdings (1836), enterprises have the advantage of technology and brand, and the prospect of high-end retail business in the mainland is broad.

The report gave a target price of nine Hing 18.19 yuan, compared with the potential increase of about 21.26% of yesterday's closing market price. There are three reasons: first, the earnings per share of Yu Xing, Yu Xing and nine Xing, compared with footwear manufacturers, grew faster, and their P / E ratios should be higher; two, nine Hing price earnings ratio was much lower than that of the listed companies, the group continued to develop the retail market, and its discount rate should be narrowed.

Goldman Sachs: BELLE valuation attractive

The fund is interested in BELLE. The market forecasts that the earnings per share of BELLE in 2010 will be 0.369 yuan and the forecast price earnings ratio is 25 times.

Goldman Sachs maintained BELLE's "buy" rating with a target price of 11.2 yuan, compared with yesterday's closing price of 10.98 yuan, with a potential increase of about 2% and less water level.

According to the bank, BELLE's current valuation seems to be attractive based on a 26% increase in earnings per share in 2011.

BELLE is also optimistic about CLSA, which believes BELLE's security buying point is 8.5 yuan, equivalent to 19 times the forecast price earnings ratio this year, and the investment rating is "buy" rating.

As for another fund, Daphne, the market forecast 2010 earnings per share were 0.438 yuan.

According to Bloomberg statistics, at present, there are 14 large companies tracked by Daphne, of which 13 have been given a "buy" rating. One recommended "hold", with an average target price of 8.99 yuan, slightly higher than the current price.

XinDa pfer business

XinDa, which has the largest share price increase since the beginning of this year, is also a Rio Tinto mainland sales network. The company predicted earlier that the same store sales growth in China and Hong Kong will double in the first quarter of this year. It is believed that the retail market will improve in the second half of the year, and the company will continue to expand its production and increase its branches. It is expected that this year will add 150 to 200 stores. The target will open 1000 branches in 2012, and the capacity will increase to 2 million pairs.

The company said it will gradually fade out of the original equipment manufacturing (business), hoping to focus on the development of the original brand manufacturing () business. Looking forward to the next one to two years, the share of export revenue will rise from 4.5% to 50%.

Compared with other mainland footwear companies, XinDa has a relatively small scale, but the valuation is also low. At present, the P / E ratio is about 14.51 times and the interest rate is about 4 per cent.