SINGAPORE (Nov 26): PhillipCapital has started coverage on Chinese department store Zhongmin Baihui Retail Group with a “buy” call and target price of $2.10, on expectations that the debt-free, cash-rich company’s expansion plans will bring about stronger earnings.

The company operates eight self-owned stores and four managed stores in Fujian province and Jiangsu province, with a collective gross floor area of 2,055,000 sq ft as at 31 October 2015.

In the coming financial year, Zhongmin Baihui will expand its store space by 18.8%. In addition, the company is upgrading stores like its flagship Wucun store at Xiamen, which will see higher traffic and presumably, additional business.

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