SOURCE: Wall Street News Alert

November 09, 2005 09:47 ET

Wall Street News Alert: Emerging Public Company Reports Better Than Expected Results From China Retail Stores! November 9, 2005

NOTE TO EDITORS: The Following Is an Investment Opinion Being Issued by Wall Street Capital Funding.

WESTON, FL -- (MARKET WIRE) -- November 9, 2005 -- Wall Street News Alert's "stocks to watch" this morning are: LJ International, Inc. (NASDAQ: JADE), Yahoo (NASDAQ: YHOO), eBay Incorporated (NASDAQ: EBAY) and (NASDAQ: AMZN).

LJ International, Inc. (NASDAQ: JADE) could be another target of aggressive investors and day traders this morning! Yesterday after the stock markets closed, the company issued a press release announcing significantly better than expected initial financial results for its new wholly owned ENZO retail chain in China.

The news of the initial financial results should get the attention of investors, as the press release states that rrevenues for the ENZO Division totaled $1.4 million for the nine-month period ended September 30, 2005. The first ENZO store, in Hong Kong, and its Shanghai flagship store have already achieved breakeven results on a store-level basis. These results are well ahead of the Company's earlier guidance where they projected $1.5 million in ENZO sales for all of 2005 and breakeven results at certain ENZO stores by the end of 2006.

Continue to watch this company! Ten ENZO stores, including the Shanghai flagship, have been opened year-to-date. The Company expects to have at least 12 ENZO stores open by the end of 2005, with the largest due to open this month in Macau, East Asia's gaming capital and one of the region's prime tourist destinations. The number of new ENZO store openings for 2005, however, could increase as additional real estate becomes available.

Investors should continue to monitor the progress of LJ International! Yu Chuan Yih, LJI's Chairman and CEO, commented, "ENZO's fast and successful start demonstrates the high demand for our products in China, the first-mover advantage we have gained from our supply-chain logistics and by being one of the first foreign-based jewelry companies to launch a retail chain in China immediately following the nation's entry into the World Trade Organization (WTO). As a company domiciled overseas but with longstanding ties to China through our supply chain advantage, LJI was able to enter the Chinese retail market early and with a high-profile presence among affluent consumers in major cities such as Shanghai and Beijing. That quick start is now paying off faster than we ever anticipated considering our initial sales results are three months ahead of schedule and breakeven at certain stores is a more impressive full-year ahead of schedule."

Mr. Yih also noted that the gross margins of the ENZO division -- 50% or more on average -- are sharply higher than the roughly 20% margins of LJI traditional wholesale business. As a result, he said, "Future sales growth from ENZO are expected to sharply improve LJI's overall net income as the division becomes profitable and covers its own expansion costs. We expect all of our ENZO stores to pass the breakeven point sometime during 2006, and we do not expect the addition of new stores this year to require any infusion of new capital. The expansion of ENZO will continue to be financed internally, out of cash generated at existing ENZO stores."

Prior to the latest press release, the stock closed yesterday at $3.30 a share.

For an in-depth profile of LJ International, visit

In case you are not familiar with the company: LJ International, Inc. (LJI) (NASDAQ: JADE), based in Hong Kong and the U.S., is engaged in the designing, branding, marketing and distribution of a full range of jewelry. It has built its global business, currently one of the fastest-growing in the jewelry industry, on a vertical integration strategy and an unwavering commitment to quality and service. LJI distributes to fine jewelers, department stores, national jewelry chains and electronic and specialty retailers throughout North America and Western Europe, with a growing retail presence in China through its ENZO stores and e-shopping sites. Its product lines incorporate all major categories sought by major retailers, including earrings, necklaces, pendants, rings and bracelets.

Stocks showing interesting activity yesterday at the close of the regular trading day were: Yahoo (NASDAQ: YHOO) up 0.1% on 14.4 million shares traded, eBay Inc. (NASDAQ: EBAY) up 1% on 26.6 million shares traded and (NASDAQ: AMZN) up 1.3% on 4.9 million shares traded.


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