China Taisan recorded a 4Q FY08 net profit of Rmb70.2m, down7.7% YoY, on the back of a 9.6% YoY increase in sales. The netprofit was 31.5% below our forecast, and showed that even with a strong customer base comprised of leading sports brands, including Nike, Adidas, Anta, and Xtep, the company was still vulnerable to the industry downturn. We have revised down our FY09-10 earnings forecasts by 36-42% to factor in potential consolidation of the sports-apparel market.
China Taisan declared a dividend of Rmb0.0815 per share, which amounts to a yield of around 14% at the current share price. The company has committed to pay out at least 30% of its net profit for FY09 as dividends, and we would expect the attractive yield and net cash of S$0.063 per share to help support the share price in the absence of meaningful growth.
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