Event:
We are closely following latest operating status of the company.
Our Analysis and Estimation:
1) Contract volume of accepted bid exceeds Rmb48bn in January & February 2009, accounting for 26.6% of 2007 operating revenue;
2) Proportion of domestic railway contract exceeds 83%; it is predicted that new indent scale will reach Rmb450bn-Rmb500bn in 2009;
3) Attentions should be paid to potential risks;
Investment Suggestion:
We forecast 2008-2010E EPS at Rmb0.07, Rmb0.26 and Rmb0.34 respectively, implying P/E at 86x, 22x and 17x, and maintain “Cautious” rating for the counter.