Event
The company issued 2008 annual report today.
During the period under view, the company realized business turnover of Rmb3.45bn (+26% yoy), net profit attributable to shareholders of parent of Rmb890mn (+41% yoy), and diluted EPS of Rmb1.70.
Our Analysis and Estimation
The company plans to promote its brand image with “high-end strategy” and to expand sales growth space of other products, which will lay firm foundation for further adaptation of new environment.
Its EPS is below our expectation of Rmb0.01, which is mainly because gross margin is slightly lower by 0.5ppt and that operating expenditure higher by 1.9ppt.
Acceleration of wine consumption might be temporarily slowed as consumption environment gradually changes.
Investment Suggestion
We forecast its 2009-2011E EPS to be Rmb2.16, Rmb2.60 and Rmb3 respectively, and “Recommended” rating is hereby maintained. After comparing its valuation with its peers, we consider its relative investment value being prominent.