Dutton Associates Announces Investment Opinion: LJ International Strong Speculative Buy Rating in Update by Dutton Associates
April 12 2006 - 12:03PM
Business Wire
Dutton Associates continues its coverage of LJ International Inc.
(Nasdaq:JADE) with an update report maintaining its rating at
Strong Speculative Buy. The report by Dutton senior analyst Sally
L. Wallick, CFA is available at www.jmdutton.com as well as from
First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading
financial portals. Hong Kong-based LJ International Inc. (LJI)
designs, manufactures, distributes and markets a full range of fine
jewelry. The Company's customers include leading department and
discount stores, fine jewelers, national jewelry chains, electronic
and specialty retailers, and home-shopping television networks
throughout North America, Western Europe, Japan, Hong Kong and
China. In addition, its ENZO division retails jewelry in China. We
believe that LJI's vertically integrated structure, extensive
product line, and diversified customer base provide significant
competitive advantages, while its expansion into the retail jewelry
business in China results in substantial new growth opportunities.
LJI's fourth-quarter revenue increased 26% year over year to a
record $31.6 million while diluted EPS were $0.09, up 50% year over
year and ahead of management's most-recent guidance. Full-year 2005
revenue totaled $94.6 million, and diluted earnings came in at
$0.24 per share, up slightly from $0.23 per share in the prior
year. We believe that China, with annual retail sales of more than
$600 billion (including an estimated $15 billion in jewelry sales),
represents a large and very exciting growth opportunity for LJI.
The Company is penetrating this market mainly by means of ENZO
retail stores. The ENZO division has, to date, performed better
than expected, and it appears to be on track for reduced losses
(and breakeven EBITDA) in 2006 and profitability in 2007. We
reiterate our Strong Speculative Buy rating on LJI Common Stock and
a $4.80 price target. About Dutton Associates Dutton Associates is
one of the largest independent investment research firms in the
U.S. Its 29 senior analysts are primarily CFAs, and have expertise
in many industries. Dutton Associates provides continuing analyst
coverage of over 130 enrolled companies, and its research,
estimates, and ratings are carried in all the major databases
serving institutions and online investors. Our annual research
coverage, which currently costs US $35,000 prepaid, includes 4
Research Reports, typically published quarterly, and requisite
Research Notes. Dutton Associates received $55,000 from the Company
(for renewal) and Investor Relations International for 8 Research
Reports with coverage commencing on 10/23/2003. We do not accept
payment of our fees in company stock. Our principals and analysts
are prohibited from owning or trading in securities of covered
companies. The views expressed in this research report accurately
reflect the analyst's personal views about the subject securities
or issuer. Neither the analyst's compensation nor the compensation
received by us is in any way related to the specific ratings or
views contained in this research report or note. Please read full
disclosures and analyst background at www.jmdutton.com before
investing.
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