Event
The company issued 2008 annual report on March 30, 2009, according to which it realized business turnover of Rmb24.228bn (+29.04% yoy), net profit attributable to shareholders of listed company of Rmb2607mn (+4.52% yoy), and EPS of Rmb1.55.
Our Analysis and Estimation
Revenue increase in 2008 was mainly due to capacity expansion.
Cost ascension in 2008 caused compound gross margin to decline.
Its capacity will further expand in the future.
Potential risks are worthy of attention.
Investment Suggestion
Capacity expansion will be an impetus of its internal value. As the industry is entering into a prosperous period, impact brought by capacity expansion might beyond market expectation, thus “Recommended” rating is maintained.