1. 2008 performance can not reflect the company’s normal operation.
2. We predict no massive delayed delivery of indent in 2009.
3. 2009 general gross margin will slightly exceed that of 2007.
4. Physical quantity is expected to grow ~30% in 2009.
5. Cryocable business of the company has not seen profit.
6. Indent volume is expected to promote obviously after May 2009.
7. Earning forecast and rating: We forecast the company’s 2009-2011E EPS to be Rmb1.06, Rmb1.30 and Rmb1.52 respectively, representing P/E ratio at 17x, 14x and 12x, which is under the industrial average; “Overweight” rating is hereby given.
8. Potential risks: 1) Fierce industrial competition poses pressure to the company; and 2) Possible sharp fluctuation of copper price will lead to influence on profitability.