STOCKWATCH: Li & Fung extends gains after results

HONG KONG (AFX-ASIA) - Li & Fung shares were higher, extending morning gains in midafternoon trade after the company released higher-than-expected 2000 results, dealers said.	    The stock has also been under pressure recently on concerns about sales to its major market, the U.S., could be affected by the downturn there but in a slightly more optimistic market following Wall Street's performance Friday, the stock has rebounded.	    The company said 200 net profit rose to 870.38 mln hkd from 574.63 mln on turnover of 24.99 bln, up from 16.29 bln.	    At 3:32 pm, Li & Fung was up 0.60 hkd at 12.70 on 45.77 mln shares.	    The Hang Seng was up 377.70 points at 12,961.06.	    An analyst with a local brokerage said the results came in higher than market expectations.	    "Some people are surprised that Li & Fung is still performing so well despite the slowdown in the U.S.," she said.	    She is calling a buy on the stock, with a 12 month target of 18 hkd.	    Analyst Giovanni Kuang from Tung Tai Securities said the fact that Li & Fung managed to perform better than expected has lifted sentiment on the stock.	    "The market has been worried about the company following the downturn in the U.S. economy. Investors are buying the stock after the company's results beat market expecations."	    He cautioned, however, that the company's results could be affected in the current year as the U.S. economy looks set for a hard landing.	    About 80 pct of the group's turnover comes from the U.S. but Kuang also noted the company acts as a middle-man and offers value-added services.	    "This shows that they have really good management and can still undertake improvements in a slowing economy," he said.	    He is not calling a buy on the stock as it is not certain yet whether the market has bottomed out or is just rebounding after seeing price weakness last week. 

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