*Result* The Hour Glass

Downgrade to HOLD. The co achieved profit of $32.8m in FY10, while balance sheet remains strong as net cash grew 36% to $36m. Excluding a fair value gain on investment properties of $2.8m, core earnings reached pre-crisis levels of $30m. However, as consumer demand for luxury items softens amid economic uncertainties, start up costs on 3 new store expansions @ One Raffles Place, Marina Bay Sands, Knightsbridge and escalating rentals, we expect slower earnings momentum.