FUQI International, Inc. (FUQI), a designer and manufacturer of precious metal jewelry in China, reported second quarter financial results this morning. Revenues rose 154% year over year to $66.9 million, compared to $26.3 million. The one analyst that covers the company expected revenues of $62.8 million. Net income surged 253% to $5.3 million, or 25 cents per share, vs. $1.5 million, or 10 cents per share, for the same period last year. The analyst was expecting earnings of 20 cents per share.
Mr. Yu Kwai Chong, Chairman of Fuqi International commented, ”We are very pleased with our results for the second quarter, which exceeded our expectations, despite some slowing in the growth rate of the Chinese economy, and the economic impact of the May earthquake in the Sichuan Province. In spite of these issues, we continue to see increasing demand for our products, and larger orders from our existing customers. With our strong capital position, the right mix of products and distribution and a strong management team, Fuqi, along with our recent retail acquisition Temix, is poised to build the leading provider of luxury jewelry products in China.”
Based on solid financial results to date, FUQI raised revenue and earnings for the full year fiscal year of 2008. The company now expects to recognize total revenues of $325 – $333 million vs. prior guidance of $305 -$315 million. Net income is now projected to be $1.07 – $1.09 per share, vs. prior guidance of $0.98 – $1.04.
”We remain optimistic about the future growth of Fuqi, as evidenced by our increase in guidance,” said Mr. Chong. “Our acquisition of Temix is complete and we are anticipating smooth execution of our integration plans. We are well on track to meet our goals for the year of opening or acquiring 60-80 retail counters and 8 to 10 stores. We have been evaluating the marketplace and are excited about the opportunities we see ahead of us, and in fact have already identified other possible locations. Our aggressive growth strategy combined with our strong capital position will allow us to quickly ramp up our retail business, while meeting the demand in our wholesale markets as well. We will continue to manage our balance sheet to be prepared to capitalize on opportunities we see in the marketplace.”
Shares of FUQI closed at $8.68 on Monday and have traded in a 52-week range of $6.02 – $11.95. With 20.9 million shares outstanding, FUQI has a market cap of $181 million and a trailing twelve-month P/E of 7.1.
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