I have added a few more shares in Xtep (HK:1368) to the portfolio. This has been one of my more disappointing investments and my original purchase is currently sitting at well below cost (even after allowing for the strong dividend payments). However, the company has remained profitable, produces good cash flow and has a strong balance sheet (net cash). Even if earnings decline somewhat as the industry continues to go through a consolidation phase, I expect that the shares will offer good value at current levels.
As an aside, it was a bit disappointing to see the shares jump after a broker put out a bullish report on the whole sector this morning. I ended up paying an average of HK$2.79 per share (including costs). If they drop back a bit next week, I will consider buying a few more.