The company’s performance is beyond our expectation, and the high dividend ratio continues. In 2008, the company realized net profit attributable to parent of Rmb173mn (+41.13% yoy), and EPS of Rmb0.75. Besides, the company sent Rmb3.7 dividend cash for every ten shares, with dividend ratio at 50%.
Hotel business enjoyed steady growth; Olympic effect tended to be evident.
Nanshan mountain scenic spots sustained rapid growth.
Income of travel agency and exhibition business declined due to negative impacts.
Future highlights: Assets injection and income share of scenic spots tickets.
Earning forecast and rating: Not considering influence of income share from scenic spots tickets, we predict the company’s EPS in 2009-2010E to be Rmb0.75 and Rmb0.89, representing dynamic P/E ratio at 20x and 17x based on share price of Rmb14.84. Supposing ticket income share to be accrued from 2010, 2010E EPS is Rmb0.49, representing dynamic P/E ratio at 30x. Its valuation is reasonable, and “Neutral” rating is hereby given.