The company unveiled its annual report: In 2008, it achieved operating revenue of Rmb1.361bn (-11.47% yoy), operating profit of Rmb110mn (+5.16% yoy), net profit attributable to shareholders of parent of Rmb75.1138mn (-8.73% yoy) and basic EPS of Rmb0.41, which was above our expectation; besides, the company proposed dividend distribution of pretax Rmb1 cash for every ten shares.
Comment:
1. Gross margin substantially grows.
2. 2009 performance is not satisfactory.
Earning forecast and rating: We predict 2009-2010E EPS to be Rmb0.31 and Rmb0.39, representing P/E ratio at 38x and 30x respectively based on closing price of Rmb11.77 on April 14, 2009; “Neutral” rating is hereby given.
Potential risks: Investors may pay attention to risks from 1) export indent reduction and sharp price slump; 2) price fluctuation of apple purchase and that of 3) exchange rate.