Event
According to 2008 annual report issued on April 10, 2009, the company realized business turnover of Rmb4568.73mn (+18.35% yoy), total profit of Rmb585.97mn (+15.76% yoy), net profit attributable to parent of Rmb446.03mn (+21.28% yoy), and EPS of Rmb0.3678.
Our Analysis and Estimation
2008 business turnover augment is mainly due to capacity expansion.
The company’s gross margin of sales enjoyed improvement in 2008.
Future capacity expansion is under acceleration.
Potential risks are worthy of attention.
Investment Suggestion
Capacity expansion will be impetus for acceleration of the company’s internal valuation. As the industry is now in recovery, influence of capacity expansion might be beyond market expectation. We maintain “Recommended” rating for the counter.