In 2008, the company realized operating revenue of Rmb656mn (+13.6% yoy), net profit attributable to parent of Rmb98.17mn (-26.7% yoy) and basic EPS of Rmb0.44, which was better than market expectation (Rmb0.39) and our expectation (Rmb0.41). Besides, the company announced to distribute dividend of pretax Rmb2 for every 10 shares based on the total equity.
We predict the company’s 2009-2010E EPS to be Rmb0.44 and Rmb0.55, representing P/E ratio of 20x and 16x based on closing price (Rmb9.02) of March 6, 2009. The company has competitively advantageous valuation; however, considering its relocation and uncertain performance in 2009 due to unclear economic recovery, we maintain “Neutral” rating for the counter.