For the first quarter of 2009, the company realized business turnover of Rmb151mn (+94.52% yoy), operating profit of Rmb22.09mn (+Rmb44.35mn yoy), total profit of Rmb32.86mn (+44.05mn yoy), net profit attributable to owners of parent of Rmb24.66mn (+34.38mn yoy), and it was the initial profit in the first quarter. Its EPS was Rmb0.13, being Rmb0.2 above Rmb-0.07 during the same period of the previous year, which was in line with our expectation.
We forecast its 2009-2010E EPS to be Rmb1.81 and Rmb2.01, representing dynamic P/E ratio at 16x and 14x based on closing price of Rmb28.78 on April 21, 2009. Given its valuation advantage, “Overweight” rating is hereby maintained.
Potential risks: Investment slide of real estate industry; uncertainty of government investment progress and market transaction risks.