China Hongxing

China Hongxing +8% after revealing plans to invest Rmb550m to ramp up prodn by 41% to 24m pairs/yr by 1H11. It also plans to open some 2,000 new stores by end 2011 extending its reach to tier 3 & 4 cities. Co expects to see positive revenue growth in FY10 despite a weaker 1H10. The stock continues to be underpinned by consumption theme story as rising affluence spur investor confidence in consumer-related plays esp those geared towards the burgeoning growth of the middle-income bracket. Do not rule out privatisation route as the stock trades below net cash of $0.20/share. Stock trades at 25x FY10 P/E.