In 2008, the company realized business turnover of Rmb1232mn (+14.34% yoy), operating profit of Rmb63.9490mn (+28.16% yoy), net profit attributable to parent of Rmb68.8324mn (+7.64% yoy), and basic EPS of Rmb0.43. It proposed neither share transference nor distribution plan. Besides, it planned to set up subsidy in Shanghai to be mainly engaged in sales of paper, raw material and paper pulp.
As its equity control of affiliated companies with substantial profit had reduced to 16.63%, and risks from global financial crisis still exist, the company’s profit is facing downside risks. We forecast that its EPS in 2009 and 2010E to be Rmb0.39 and Rmb0.57. Based on closing price of Rmb9.50 on March 9, 2009, its representing P/E ratio is at 24x and 17x, and “Neutral” rating is hereby maintained.