INTERVIEW-China's Rebecca Sees 2008 EPS Up 40-50 Pct

By Kirby Chien

BEIJING (Reuters) - Henan Rebecca Hair Products Co. (600439.SS) said on Friday it expects earnings per share to rise 40-50 percent this year, as it expands rapidly in Africa and sales to its largest market, the United States, remain steady.

The company also aims to double sales over the coming next three years as it rapidly expands production in Africa, where sales are expected to surpass those in the United States over the same period.

"Our sales will double to over $300 million within three years," its president Zheng Youquan, told Reuters in an interview on the sidelines of China's annual session of parliament.

The maker of wigs and hairpieces racked up a 15 percent rise in revenues to $1.7 million in 2007, about two thirds of which went to the United States. Almost all of the company's products are sold overseas.

Rebecca, based in the northern province of Henan, posted an 87 percent rise in net profits last year and expects earnings per share to hit 1.1 -- 1.2 yuan this year from 0.81 yuan in 2007, said Zheng.

The healthy profits came despite the appreciation of China's currency, the yuan, and rising costs of raw materials and labour, he said.

"We pass on our higher costs to customers," he said.

Last year, the company raised prices twice, the first time by 28 percent and the second by 20 percent, and expected another price rise this year, said Zheng.

Zheng said Rebecca's price rise this year would be used to offset the expected 10 percent appreciation in the yuan.

However, with inflation in China at the highest level in 11 years and the appreciation of the yuan accelerating, the company needs to extend its production into Africa.

Rebecca will increase production or build new facilities in several African countries, such as Nigeria, Ghana and Zimbabwe. However, any single plant would require an investment of less than $10 million, said Zheng.

The company has also begun to build its domestic retail network with shops in Beijing and Shanghai. By 2010, the company hoped to have a network of 500 retail outlets throughout the country, he said.

($=7.11 yuan)

(Reporting by Kirby Chien; Editing by Nick Macfie)