According to its 2008 annual report, the company realized business turnover of Rmb76.66bn (+23.0% yoy), net profit attributable to shareholders of parent of Rmb28.423bn (+38.56% yoy), and basic EPS of Rmb0.58. Besides, the company distributed pretax dividend cash of Rmb0.10 for every ten shares.
Generally, net profit growth in 2008 is mainly due to the increasing scale and cut of real income tax rate. However, pressure of assets quality is beyond our expectation, which might cause negative impact to its profitability in 2009. We predict the company’s EPS in 2009-2010E to be Rmb0.51 and Rmb0.55 respectively; based on closing price of Rmb5.88 on March 18, 2009, its PE in 2008 is 10.1x, and PB 2.0X. Given comparatively low valuation, we hereby maintain “Overweight” rating for the counter.