KUALA LUMPUR (Jan 27): Loss-making K-Star Sports Ltd is seen turning around in 2017 as the sports footwear manufacturer expands its sales points, and distributorship to raise market share, executive chairman and CEO Ding JianPing said.

Ding said the rejuvenation of K-Star (fundamental: 1.65; valuation: 1.2) also hinged on China's manufacturing dynamics.

"We will be expanding more, that's why I think the company will only be profitable in 2017.

"Currently, China's manufacturing sector is experiencing overcapacity, but it will improve over time. It should be better in 2017," he told reporters after K-Star's extraordianary general meeting here today.

Ding said he foresaw consolidation in China's manufacturing sector, hence, oversupply in the footwear industry was expected to ease.

As the overcapacity situation improves, he expects to see a 5% to 10% growth in K-Star's revenue this financial year ending December 31, 2015 (FY15).

In FY14, although K-Star had seen quarterly losses, these losses had, however, narrowed.

K-Star's net loss narrowed to RM5.49 million in the third quarter ended September 30, 2014 from a net loss of RM32.91 million a year earlier.

Cumulative nine-month net loss came to RM15.32 million versus a net loss of RM36.61 million a year earlier.

Today, Ding also offered his opinion on the thinly-traded K-Star shares. He said he expected K-Star's share price to improve, taking a cue from China-based companies listed on the Hong Kong Stock Exchange.

"In the 1990s, people in Hong Kong had bad impression towards Chinese companies, but later in the early 2000s, the perception had changed," he said.

In Malaysia, K-Star shares has not been traded since last Friday (Jan 23). The stock was last transacted last Thursday (Jan 22) at 12 sen for a market capitalisation of RM32 million.

K-Star shares had declined 8% this year, underperforming the FBM KLCI's 2% rise.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)