Event:
The company released 2008 annual report, according to which it realized operating revenue of Rmb33.887bn (+14.53% yoy), net profit attributable to parent of Rmb623mn (-12.38% yoy) and EPS of Rmb0.50.
Our Analysis and Estimation:
1. Commerce will enter into the adjustment.
2. Lianfa Property is expected to bottom out.
3. The company will control holdings of C&D Real Estate Corporation Limited.
Investment Suggestion:
We forecast 2009-2011E EPS to be Rmb0.63, Rmb0.69 and Rmb0.77 respectively. Progress of the invested project, Zijintongguan is expected to speed up; once it is put into production, the company’s performance will be greatly boosted. As what we have expected, economic zone of western side of the channel will mightily promote operation of the company. We maintained “Recommended” rating for the counter.