Excerpts:

Event

Adjustment & revival plan of nonferrous metal industry was reviewed and approved in principle on the General Meeting of the State Council which presided by Premier Wen Jiabao on February 25, 2009.

Our Analysis and Estimation

Details of the plan are still unknown. Several main revival plans issued have no big differences with those of the previous support plans of the field. They mainly include discarding of out-of-date capacity, encouragement of technology innovation, promotion of industry integration and reinforcement of resources guarantee, etc. Our analysis towards these several items is as follows:  

Acceleration of out-of-date capacity discarding is favorable to healthy development of the nonferrous industry.

Encouragement of technology innovation is favorable to the technology-oriented enterprises

To focus on recycling & inventory of cooper and nickel industry

Merger & restructuring is of help to conglomerate nonferrous metal enterprises

Investment Suggestion

Given share price valuation for the moment, we hereby maintain rating of “Neutral” for the nonferrous metal industry