Excerpts:

1. The company was ratified as a hi-tech enterprise by Shanxi province, and will enjoy a 10% income tax preference for three consecutive years from 2008 with a tax payment rate of 15%. 
 
2. We think tax rate adjustment this time will substantially increase the company''s performance, and its annual growth during 2008-2010 is predicted to be Rmb0.04, Rmb0.05 and Rmb0.06 respectively.
 
3. Sustained growth of the company''s core product guaranteed its performance, and secondary products also created opportunities for its development. In 2008, performance of the company continued growing rapidly; during January-September, it realized total turnover of Rmb929mn (+34.14% yoy), and net profit attributable to parent of Rmb69.6582mn (+102.23% yoy). Its products are mostly cost-effective and are within the medical insurance range, owning large share in the rural markets. It might be a beneficiary of the third terminal market expansion triggered by central government''s medical reform.   
 
4. We hereby up-regulate the company''s EPS in 2008-2010 to Rmb0.61, Rmb0.73 and Rmb0.92 respectively for tax payment preference, representing P/E Ratio at 19x, 16x and 13x separately. Given its potential valuation and market growth, we maintain our rating of "Overweight" for the counter.