In 2008, the company reported operating revenue of 1.615bn (+16.77% yoy); operating profit of Rmb8.71mn (-52.74% yoy), net profit of Rmb959mn (-20.57% yoy) and diluted EPS of Rmb0.07, slightly lower than our expectation of Rmb0.08.
We forecast the company’s 2009-2010E EPS to be Rmb0.13 and Rmb0.15 respectively, representing P/E ratio at 93x and 78x based on current closing price of Rmb11.76; valuation is comparatively high, thus we maintain “Neutral” rating for the counter. Besides, we suggest investors concerning about risks of steel price fluctuation.