Dutton Associates Announces Investment Opinion: LJ International Strong Speculative Buy Rating in Update by Dutton Associates

Dutton Associates continues its coverage of LJ
International Inc. (Nasdaq:JADE) with an update report maintaining its
rating at Strong Speculative Buy. The report by Dutton senior analyst
Sally L. Wallick, CFA is available at www.jmdutton.com as well as from
First Call, Bloomberg, Zacks, Reuters, Knobias, and other leading
financial portals.
   Hong Kong-based LJ International Inc. (LJI) designs, manufactures,
distributes and markets a full range of fine jewelry. The Company's
customers include leading department and discount stores, fine
jewelers, national jewelry chains, electronic and specialty retailers,
and home-shopping television networks throughout North America,
Western Europe, Japan, Hong Kong and China. In addition, its ENZO
division retails jewelry in China. We believe that LJI's vertically
integrated structure, extensive product line, and diversified customer
base provide significant competitive advantages, while its expansion
into the retail jewelry business in China results in substantial new
growth opportunities. LJI's fourth-quarter revenue increased 26% year
over year to a record $31.6 million while diluted EPS were $0.09, up
50% year over year and ahead of management's most-recent guidance.
Full-year 2005 revenue totaled $94.6 million, and diluted earnings
came in at $0.24 per share, up slightly from $0.23 per share in the
prior year. We believe that China, with annual retail sales of more
than $600 billion (including an estimated $15 billion in jewelry
sales), represents a large and very exciting growth opportunity for
LJI. The Company is penetrating this market mainly by means of ENZO
retail stores. The ENZO division has, to date, performed better than
expected, and it appears to be on track for reduced losses (and
breakeven EBITDA) in 2006 and profitability in 2007. We reiterate our
Strong Speculative Buy rating on LJI Common Stock and a $4.80 price
target.

   About Dutton Associates

   Dutton Associates is one of the largest independent investment
research firms in the U.S. Its 29 senior analysts are primarily CFAs,
and have expertise in many industries. Dutton Associates provides
continuing analyst coverage of over 130 enrolled companies, and its
research, estimates, and ratings are carried in all the major
databases serving institutions and online investors.
   Our annual research coverage, which currently costs US $35,000
prepaid, includes 4 Research Reports, typically published quarterly,
and requisite Research Notes. Dutton Associates received $55,000 from
the Company (for renewal) and Investor Relations International for 8
Research Reports with coverage commencing on 10/23/2003. We do not
accept payment of our fees in company stock. Our principals and
analysts are prohibited from owning or trading in securities of
covered companies. The views expressed in this research report
accurately reflect the analyst's personal views about the subject
securities or issuer. Neither the analyst's compensation nor the
compensation received by us is in any way related to the specific
ratings or views contained in this research report or note. Please
read full disclosures and analyst background at www.jmdutton.com
before investing.