Janney Montgomery Scott Starts Zuoan Fashion Limited American (ZA) at Neutral, Strong Long Term Growth
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Price: $1.40 --0%
Rating Summary:
2 Buy, 1 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 12 | New: 19
Rating Summary:
2 Buy, 1 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 7 | Down: 12 | New: 19
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Janney Montgomery Scott initiates coverage on shares of Zuoan Fashion Limited American (NYSE: ZA) with a Neutral rating and $8 fair value.
The firm reports that its Neutral rating is due to an environment of portfolio "de-risking" with significantly diminished appetite for Chinese growth stories currently, inherent risks of investing abroad and channel visibility on sales and inventory, and the need for proven, consistent execution. Janney believes that shares a currently fairly valued.
The company looks favorable for the long term as ZA's objective to grow the top line approximately 30% annually through new store expansion, a business model that generates healthy operating margins, macro environment in China that should generate robust consumer demand for many years, and attractive valuation given the company's targeted growth rate.
Jenney comments that, "For those investors who seek exposure to higher-risk Chinese IPOs, such as ZA, we recommend taking a speculative portion of a portfolio and employing a "basket" strategy, accumulating positions in diversified investments in the consumer space, in order to take advantage of the longer-term structural growth in China and the consumer space."
The firm is introducing its EPS estimates at $0.89 for FY10, $1.17 for FY11, and $1.48 for FY12.
For more ratings news on Zuoan Fashion Limited American click here and for the rating history of Zuoan Fashion Limited American click here.
Shares of Zuoan Fashion Limited American closed at $6.99 yesterday.
The firm reports that its Neutral rating is due to an environment of portfolio "de-risking" with significantly diminished appetite for Chinese growth stories currently, inherent risks of investing abroad and channel visibility on sales and inventory, and the need for proven, consistent execution. Janney believes that shares a currently fairly valued.
The company looks favorable for the long term as ZA's objective to grow the top line approximately 30% annually through new store expansion, a business model that generates healthy operating margins, macro environment in China that should generate robust consumer demand for many years, and attractive valuation given the company's targeted growth rate.
Jenney comments that, "For those investors who seek exposure to higher-risk Chinese IPOs, such as ZA, we recommend taking a speculative portion of a portfolio and employing a "basket" strategy, accumulating positions in diversified investments in the consumer space, in order to take advantage of the longer-term structural growth in China and the consumer space."
The firm is introducing its EPS estimates at $0.89 for FY10, $1.17 for FY11, and $1.48 for FY12.
For more ratings news on Zuoan Fashion Limited American click here and for the rating history of Zuoan Fashion Limited American click here.
Shares of Zuoan Fashion Limited American closed at $6.99 yesterday.
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