(The following statement was released by the rating agency)
May 30 -
Summary analysis -- E-Land Fashion China Holdings Ltd. ------------ 30-May-2012
CREDIT RATING: BB-/Stable/-- Country: Hong Kong
Primary SIC: Apparel and
Mult. CUSIP6: 26861W
Credit Rating History:
Local currency Foreign currency
15-Jul-2010 BB-/-- BB-/--
The rating on E-Land Fashion China Holdings Ltd. reflects the company's small scale in comparison with global peers', its exposure to the highly fragmented and increasingly competitive fashion industry in China, and the weaker credit profile of the wider E-Land Group. The robust growth in demand for quality women's apparel in China, and E-Land Fashion's good brand recognition in China and good profitability counterbalance these weaknesses.
We view E-Land Fashion's business risk profile as "weak". We believe that the fast-changing fashion industry in China and intensifying competition will challenge the company's market position. The top five apparel retailers in China, including E-Land Fashion, account for less than 5% of the country's total women's apparel retail market. In addition, the rapidly expanding Chinese market is likely to continue to attract well-established international brands, exacerbating competition, particularly in higher-tier cities. Nevertheless, E-Land Fashion has established a good brand image and market position in China by having large department stores as its major distribution channels.