NEW YORK, Sept. 27, 2004 (PRIMEZONE) -- The following is an investment opinion issued by Investrend Research Syndicate:
Investrend Research affiliate Fundamental Research Corp. has initiated coverage of Dragon-Tex (Group) Ltd. (TSX Venture Exchange:DTX) with a "Buy -- 3 (Average Risk)" rating and fair value of C$1 (current price: $0.43).
The following is a summary of the full report. The full 15-page report is now available free for a limited time at www.fundamentalresearchcorp.com and at www.investrendresearch.com.
Dragon-Tex is a Hong Kong-based company that manufactures various types of woven fabrics such as denim. The products are delivered mainly to garment factories in China, or other less developed countries for further production. End products are exported to the United States, Europe, Japan, South East Asia and other countries. Dragon-Tex also trades in cotton yarn products and children's apparel which are exported to China and Australia. The company has facilities in Hong Kong and China.
For FY2004, the company earned $762,876 on revenues of $17.3 million. Fundamental's ratings are based on Dragon-Tex trading below industry multiples, its DCF model, China's entry into the WTO and the CEPA agreement between Hong Kong and China which will lower trade barriers for Hong Kong based companies, and cotton industry fundamentals. Risks include the fact that the company operates in a highly competitive sector although it plans to participate in industry consolidation through acquisition. In July the company announced that it had signed a letter of intent to acquire another textile company, River Richie of Hong Kong, for $1.9 million and 1.25 million in shares. For FY2004, River Richie earned about $583,000 on revenues of $12.9 million.
Both Fundamental Research and Investrend Research subscribe to the "Standards for Independent Research Providers" at www.firstresearchconsortium.com. A fee of less than $25,000 was provided to Fundamental to cover DTX by an investor who may own shares of the company.
The full 15-page initial report is available at: http://www.fundamentalresearchcorp.com/PDF/dtxinitial.pdf and www.investrendresearch.com. Investors are advised to read disclosures and disclaimers carefully before trading in the equities of any company under coverage.
Anyone interested in receiving alerts regarding Dragon-Tex Ltd. research should email contact@investrend.com and distribution@fundamentalresearchcorp.com with "DTX" in the subject line.
Contacts:
Dragon-Tex Ltd., Alan Chan -- Director, Telephone: (403) 229-2337, www.dragon-tex.ca
Investor Relations, The Howard Group, Grant Howard, Telephone: (888) 221-0915, Email: info@howardgroupinc.com, www.howardgroupinc.com
Fundamental Research, Brian Tang, West Vancouver, BC, Canada, Telephone 604-913-2373, Email info@fundamentalresearchcorp.com, Website: http://www.fundamentalresearchcorp.com
Investrend Research Div., Investrend Communications, Inc.: (718) 896-5060, R. Hempel, email: contact@investrend.com. Web site: www.investrendresearch.com