NVC Says It Plans to Open 35 Stores Outside China This Year
The company will set up franchise outlets in Cambodia, India, Myanmar and Saudi Arabia, founder and CEO Wu Changjiang said in an interview with Bloomberg on June 24. NVC, based in Huizhou, Guangdong, will also look for acquisitions in markets including Australia, Italy and the U.S., he said.
“We will move China’s successful model to emerging markets like India and Brazil by franchising and own-brand selling,” Wu said, “But for the developed areas, I prefer to acquire local companies with market value of about 500 million yuan.”
The company’s overseas business may contribute 50 percent of total revenue in the long term compared with about 20 percent now, as it increases the number of franchise stores in China to 3,000 from 2,810, Wu said.
Goldman Sachs Group Inc. has a “buy” rating on the company, which it says is China’s largest lighting-product maker, and a 12-month share-price estimate of HK$5, according to a report published June 7.
NVC was unchanged at HK$3.91 as of 2:58 p.m. in Hong Kong trading. The shares have lost 3.9 percent this year, compared with a 4.4 percent decline in the benchmark Hang Seng Index.
The Goldman report said the company’s gross profit margin may rise 40 percent a year to 2013 because of the popularity of the company’s brand and increasing revenue from light emitting diode products.
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---Editors: Stan James, Hwee-ann Tan
To contact the editor responsible for this story: Andreea Papuc in Hong Kong at Apapuc1@bloomberg.net