BOC International released the first time BELLE International (01880-HK) and the big city simultaneous rating, the target price of 8.1 yuan, a 08 year forecast earnings ratio of 25.5 times.

The report predicts that BELLE's revenue will face some downside risks, mainly because the company overestimates the sales volume of each brand, the rapid expansion in the three tier cities, and the expected growth of same store sales.

The report indicates that due to the further growth momentum of BELLE's footwear business, the newly acquired brands and licensed foreign brands will come from the future, but the profit margin of the business is only about 9 to 15% lower than the average. With the change of sales mix, the profit margin of BELLE's 08 years will be narrowed from 14.8% to 14.8% in 07 years, and then further to 14% in 09 years.

In addition, the report points out that BELLE will gain a synergy from the acquired brands, take over production from the subcontractors, reduce inventories, make full use of its logistics infrastructure, and add plans to new stores in department stores, but believe that its effect will not be apparent until 2010.