Li & Fung Jumps After Calling 2013 a Solid Year: Hong Kong MoverBloomberg News
Li & Fung Ltd. rose the most in almost five months in Hong Kong trading amid speculation traders who had bet on the shares’ decline were buying them back after the company called its 2013 performance “solid.”
The world’s largest supplier of clothes and toys to retailers rose 9.6 percent to close at HK$10.78 in Hong Kong, the biggest gain since Aug. 15. The Hang Seng Index rose 0.1 percent.
Li & Fung, whose customers include Wal-Mart Stores Inc., and Target Corp., said in a statement yesterday that its 2013 performance was in line with its target to return to 2011 levels after net income fell last year for the first time since 2008. The supplier, which didn’t give a specific forecast, will probably report a 1 percent increase in profit for last year based on the average of 12 analyst estimates compiled by Bloomberg.
“The stock was heavily shorted ahead of the news so a lot of investors are now busy covering their short positions,” Andrew Sullivan, a sales director at Kim Eng Securities said by phone today.
The Hong Kong-based company will also start a new unit to help vendors improve factory safety after recent accidents in Bangladesh highlighted the need to improve working conditions, according to the company’s statement to Hong Kong’s stock exchange yesterday. The company will offer its suppliers services such as product testing and logistics support to factories, it said.
The supplier got about 54 percent of its merchandise from China in 2012, while less than 10 percent came from Bangladesh, according to the company.
Li & Fung “will be reorganizing its vendor support services to focus more intensely on factory compliance following recent tragedies in the garment industry, as well as the on-going needs for stronger oversight,” the company said in the filing.
The company said it will announce a three-year plan including the factory compliance changes in March.
International clothing chains are under pressure to help improve conditions in Bangladesh’s $20 billion apparel industry after fires and the April collapse of the Rana Plaza factory complex that killed more than 1,100 people. Two groups led by U.S. and European retailers including Wal-Mart and Hennes & Mauritz AB agreed in November to improve work safety inspection standards there.
“We feel our responsibility is to play an even bigger role in bringing about and speeding up systematic, positive change in the industry,” Chairman William Fung said in a separate, e-mailed statement yesterday. Fung will himself lead the new unit, the company said.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- Apple Is Secretly Developing Its Own Screens for the First Time
- Uber Halts Autonomous Car Tests After Fatal Crash in Arizona
- Stocks Slump as Facebook Hits Tech; Bonds Recover: Markets Wrap
- From a $126 Million Bonus to Jail: The Fall of a Star Trader
- Facebook Plunges as Pressure Mounts on Zuckerberg Over Data