HONG KONG, June 1 (Reuters) - Xinyu Hengdeli (3389.HK), a China-focused luxury watch retailer, said it had secured a two-year 300 million yuan ($43.94 million) loan facility from China Construction Bank's (601939.SS) Shenzhen Branch to fund the expansion of its retail network in mainland Chinese cities.

Elegant Watches, a Xinyu Hengdeli brand

"We will speed up our network expansion in accordance with market needs, especially following the encouraging performance by the (mainland) retail sector so far this year," Executive Chairman Zhang Yuping told Reuters on Monday 1 June.

"Banks now have a more optimistic view of the outlook for the retail sector, and are more willing to lend," Zhang said, adding that the company's sales performance in April and May had been stronger that expected. He gave no further details.

Xinyu, in which Swatch Group (UHR.VX) holds an 8.1 percent stake and LVMH Moet Hennessy Louis Vuitton (LVMH.PA) holds 7.5 percent, last week said it had pushed back an expansion plan amid the global economic crisis. It had aimed to expand its network to 300 stores by 2011, instead of 2010, from the current 210 outlets.

Shares of Xinyu gained 0.34 percent to HK$2.99 in late trade on Monday 1 June, against a 3.90 percent rise in broader market .HSI. (US$1=HK$7.8=6.827 yuan) (Reporting by Donny Kwok; editing by Chris Lewis)