Belle Plunges as It Expects Profit at Lower EndVinicy Chan
Belle International Holdings Ltd., China’s biggest footwear retailer, fell by a record in Hong Kong trading after saying 2012 profit is likely to be at the lower end of analyst estimates. Rival Daphne International Holdings Ltd. also fell.
Belle plunged 17 percent to HK$15.28, the biggest decline since it listed in May 2007. The benchmark Hang Seng Index fell 1.7 percent.
The company anticipates that its 2012 net profit will be “marginally higher” than the previous year’s and “will fall within the lower end” of analysts’ estimates from 4.29 billion yuan ($687 million) to 4.85 billion yuan, it said in a filing to Hong Kong stock exchange last night. Belle had a net profit of 4.25 billion yuan in 2011.
“Investors had high hopes on the industry recovery, but Belle’s announcement last night indicates that it will take longer for the industry to recover,” Sarah Xing, a Hong Kong-based analyst at Nomura International HK, said by phone. “Hence, investors are now readjusting their positions.”
Sales were “rather weak for apparel and footwear” over the Lunar New Year and won’t recover until second half of this year, she said.
Smaller rival Daphne dropped 6.4 percent to HK$9.68.