In 2008, the company achieved operating revenue of Rmb37.114bn (+42.6% yoy), net profit attributable to parent of Rmb124mn (-89.4% yoy) and diluted EPS of Rmb0.052.
It is predicted that 2009-2011E EPS are Rmb0.06, Rmb0.32 and Rmb0.37, representing P/E ratio at 60x, 11x and 10x based on closing price (Rmb3.53) of the previous trading day; meanwhile, “Neutral” rating is hereby given.
We suggest investors concern about potential risks as below: 1) Overall re-warming of macro economy may be posterior to expectation; 2) Negotiation on iron ore remains uncertain in 2009; 3) Implementation of promotion plan of iron & steel industry may be worse than expected.