DBS holds a buy rating on new world department store china (0825.HK) with a target price of HK $8.37; it refers to the new department store's core profit growth of 5% in 11 years, in line with expectations; it believes that the worst is over, with same-store sales growing by more than 10% in the first quarter of 12 fiscal year (July-September). Management is expected to maintain momentum for the whole of 12 years.

The bank believes that the prospects of the new department store business are attractive, and it is estimated that the compound annual growth rate of core earnings in 11-13 could be more than 25 per cent; the current price earnings growth rate (PEG) is 0.5 times.

The stock rose 1.3 per cent to HK $4.56 on Wednesday.