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Moving away from costs, Apple CEO Tim Cook also alluded to China's edge in skilled labor in a 60 Minutes interview in 2015: China put an enormous focus on manufacturing. In what we would call, you and I would call vocational kind of skills. The U.S., over time, began to stop having as many vocational kind of skills. I mean, you can take every tool and die maker in the United States and probably put them in a room that we're currently sitting in. In China, you would have to have multiple football fields. Considering the factors mentioned above, lingerie and sportswear companies might still find it beneficial to continue manufacturing in China after conducting a cost-benefit analysis. Valuation I arrive at a target price of HK$8.64 for Best Pacific by applying an 18x forward P/E multiple to my forecasted FY2017 EPS of HK$0.48. This implies a 36% upside from Best Pacific's share price of HK$6.33 as of January 27, 2017. I expect the top line to grow at a two-year CAGR of 20% from HK$2.05 billion in FY2015 to $2.95 billion in FY2017. This is based on the assumptions of a low-double-digit revenue growth rate for its primary lingerie elastic fabric business and significant new customer wins for its lace and sportswear segments.
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