Li & Fung shares tumble on growth concerns, broker report.Barclays Capital said concerns regarding the accounting changes were overdone and forecast a

Shares in Li & Fung, which manages supply chains for retailers including Wal-Mart Stores Inc (WMT.N) and Target Corp (TGT.N), have been under heavy pressure in recent sessions and extended losses after UBS Securities Asia Ltd reiterated its sell rating and cut its price target to HK$9.00 from HK$16.50.

UBS said in the report that de-rating could continue for Li & Fung, lowering its earnings estimates for 2011 through 2013 due to significant increases in operating expenses and concerns over changes in the company's accounting.

"We believe future GAAP earnings might not fully reflect the profitability of operations and that the new revenue recognition policy may distort a declining profit margin," UBS said.

Li & Fung issued a statement on Friday, saying that some contents in the research report by UBS were inaccurate, including the impact of new accounting rules affecting its earnings.

Despite the company's clarification, investors expressed concerns about the prospects for the company.

"Investors were worrying about its growth outlook which has been relying on acquisitions in the past," said Patrick Yiu, a director at CASH Asset Management.

The shares, which lagged the Hang Seng Index's .HSI 0.6 percent rise, hit a low of HK$15.42, its weakest since January 2010. It has fallen as much as 20 percent since May 19.

The stock is now at the 50 percent retracement level of its entire move up from the October 2008 low to their January 2011 record high, around HK$15.70, with traders saying that the stock could find support around current levels.

Barclays Capital said concerns regarding the accounting changes were overdone and forecast a potential upside of 50 percent from current levels.