Esprit is top fashion stock again

FOR clothing retailer Esprit the good news from the

'Formidable strength in the core business is opening new doors to growth in both wholesale and retail,' JP Morgan's analysts said in a note on the chain that has more than 550 stores worldwide.

The scale of the readjustment in expectations is reflected in the bank's revised target price from $20 a share - way below the levels Esprit commanded before releasing its earnings - to HK$36. Even after the recent run-up the new hoped-for figure remains close to 10% ahead of today's price.

The argument sustaining the jump has two strands. First Esprit's operations have been doing far better than many company watchers believed, driven both by better sales and margins in Europe, and the currency gains posted by the euro.

Second, and more importantly, analysts believe that the solid underlying performance - a 53% just in first-half net to HK$886m (£60.4m) - means that Esprit can command a higher share price relative to its earnings.

JP Morgan's new target is based on the stock trading at a multiple of 20 times earnings; previously it had looked for 16 times.

The rise for the Hang Seng index constituent has certainly been dramatic. Before it showcased its figures after the market closed last Wednesday, Esprit traded at HK$27.45. Since then it has surged by more than 20% in four sessions.

Results are also looming from Standard Chartered, which reports tomorrow. Although analysts expect a 19% rise in full-year net to $1.5bn (£793m) on lower provisions, it gave up HK$1 or 0.7% to HK$136. The bank, which is exploring tie-ups in China and is still in the protracted race to take over Korea's KorAm Bank, has climbed 6% in the past month, 10% in the past quarter and a full 66% in the past 12 months.

Profit-taking was widespread elsewhere. Cheung Kong, the lead developer, eased 50 cents or 0.7% to HK$73.75; global lender HSBC was off 50 cents or 0.4% at HK$126; and flag-carrier Cathay Pacific Airways traded at HK$15.10, down 20 cents or 1.3%. The Hang Seng index fell 78.78 or 0.6% to 13,752.75.

Japanese investors were in a more buoyant mood, targeting tech stocks after they had been whipped lower in recent sessions. The Nikkei 225 picked up 152.41 points or 1.44% to 10,701.13.

The uptick was led by bargainhunting in Advantest, the chiptesting equipment maker, which rose 370 yen or 4.7% to 8250.

Hi-tech conglomerate NEC followed in its footsteps with a gain of 28 yen or 3.7% to 395. And chipmaker Tokyo Electron joined the party, surging 320 yen or 4.7% to 7090.

Tech stocks were also favoured in Singapore, where the Straits Times index gained 19.69 points or 1% to 1,881.08. Contract electronics maker Venture added 30 cents or 1.4% to S$21.20 after a 25% jump in quarterly net profit. Statelinked Chartered Semiconductor Manufacturing, which makes chips, added three cents or 1.8% to S$1.74.

South Korean shares received a modest lift as the Government inked a trade pact with Chile, Korea's first such bilateral deal. The Seoul Composite index firmed 1.19 points or 0.1% to 882.52.