Merrill Lynch International

00709.HK reported first-quarter business performance and BofA Merrill Lynch reported raising its earnings forecasts for fiscal years 2015 and 2016 by 3 per cent and 2 per cent, reflecting the group's savings in sales and administrative costs. The target price is raised from 3.35 yuan to 3.8 yuan. Although it is believed that last year's profit has bottomed out, the share price has reflected the recovery of its business, its valuation is still high, and its rating remains "outperforming the big market".

Giordano's core business is recovering, with total sales rising 5 per cent year-on-year and same-store sales up 7 per cent in the first quarter. Gross margin rose 1.7%, but gross margin fell 170 basis points to 55.2%. The number of outlets decreased by 155 on a year-on-year basis, and operating profits are expected to recover faster than gross profits. However, the performance of South Korean joint ventures was weighed down by depressed consumer sentiment, with sales and gross margins falling 15 per cent and 18 per cent respectively. Looking ahead to the next quarter, it is expected that the pressure on gross profit margin will also decrease in the second quarter as inventory pressure has eased. Cautiously optimistic about Giordano's recovery