As shown in its 2008 annual report, the company saw business turnover increase of 5.2% yoy, net profit attributable to shareholders of parent decrease of 80.6% yoy, and basic EPS of Rmb0.17. The company planned to distribute pretax dividend cash of Rmb0.30 for each share.
We forecast its 2009-2010E EPS to be Rmb0.71 and Rmb0.81; 2009 embedded value is 1.7x based on current share price, or annual value of new business pegs at 13.6x. Its valuation is the lowest among its three peers. It is forecasted that the company will gain superior earnings during the market recovery, thus “Overweight” rating is hereby given.