According to its 2008 annual report, it realized business turnover of Rmb2642.147mn (+29.88% yoy); total profit of Rmb159.92mn (-6.42% yoy), and net profit of Rmb135.181mn (-2.21% yoy).

Price slump of carbamide mainly caused the company’s profit to slide.

 

Its performance in Q1 2009 suffered continuous slide, and it turned better in Q2. 

 

Carbamide Industry is a beneficiary of industry support strategy.

 

Rigid demand of fertilizer promotion leads increase of population and consumption upgrading of agricultural product.

While production cost of natural gas keeps steady, price slide of carbamide must reduce its total gross margin. Although total demand of fertilizer product in 2009 will be optimistic, given its Rmb0 earning in Q1 2009, under low expectation of carbamide product price, we forecast that the company’s EPS in 2009-2011 is Rmb0.20, Rmb0.26 and Rmb0.30 respectively, and rating for the counter is hereby down-regulated to “Neutral”.