RBS upgraded the rating of New World Department Store China (0825.HK) from selling to holding, and raised the target price from HK$6.20 to HK$8.00. At noon on Monday, the company announced its financial results for the fiscal year ending June. RBS pointed out that although New World Department Store China's net profit for FY10 (up 5.5% to HK$578 million) exceeded the bank's forecast value by 3%, same-store sales growth was in line with RBS's expectations and the company's own forecasts. However, according to RBS, the fundamentals of New World Department Store China may have improved in 2011, as same-store sales growth is expected to benefit from rebranding. However, RBS added that the integration will continue in the next two years. The bank believes that competition between Beijing and Shenyang, which is part of NWDS's core markets in China, will further intensify, reducing the commission charge rate for the entire market. RBS raised the company's earnings forecast for FY11-12 by 18%, following the company's higher-than-expected forecast for FY11. NWDS China dropped 1.0% yesterday to close at HK$7.90.