Belle Drops Third Day After Citigroup Cuts Its Price Target

Belle International Holdings Ltd. (1880), China’s biggest shoe retailer, dropped for a third day after Citigroup Global Markets Inc. cut its target price on expectations discounts will crimp profit margins.

The retailer slid 4.3 percent to HK$12.48 at the close in Hong Kong trading, widening its decline since Jan. 3 to 10 percent. The benchmark Hang Seng Index closed 1.2 percent lower.

Citigroup cut its target price for Belle by 19 percent to HK$16.8 and said a lack of further easing of credit conditions by China’s central bank (PBOCNET) may damp sales growth. Net income will be between 4 percent and 9 percent less than previously forecast for 2012 and 2013 on “lower gross and operating margins,” according to the Jan. 3 report by Catherine Lim, an analyst at Citigroup, who kept her “buy” rating on the stock.

“The selling pressure is likely triggered by the recent target price cuts,” said Forrest Chan, an analyst at CCB International Securities Ltd. “Investors are concerned about the slowdown in sales growth as we’re facing economic uncertainty and riding on a high base from last year.”

To contact the reporter on this story: Vinicy Chan in Hong Kong at

To contact the editor responsible for this story: Stephanie Wong at

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