UOB KayHian raises Daphne International (0210.HK) target price to HK$6.40 from HK$3.80 on lower risk premium, higher expected earnings growth, higher target P/E of 15X vs previous 10X. Keeps at Buy on view TPG Premier's subscription for company's convertible bonds, warrants should be viewed as strategic partnership instead of pure financial investment. "We are positive on the deal as it has triggered an ongoing re-rating on the Group by reducing its risk premium and accelerating its mid- to longer-term earnings growth." Raises 2009-11 profit forecasts by 13%-19% on better-than-expected sales and margins for Shoebox year-to-date, expected improvement in efficiency and faster store openings in 2010-11. Shares end +11.3% at HK$4.03; HSI +5.3%
Daphne Int'l
Textiles & Apparel
Manufacture & distributing of footwear, apparel & accessories in China.
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