In Q1 2009, the company reported operating revenue of Rmb211mn (+6.6% yoy or -3.3% qoq), operating profit of Rmb11.07mn (+3.5% yoy or +79.0% qoq), net profit attributable to parent of Rmb9.66mn (+13.4% yoy or -0.9% qoq) and basic EPS of Rmb0.018.
Earning forecast and rating: We maintain our forecast of the company and predict its 2009-2010E EPS to be Rmb0.11 and Rmb0.13 respectively, representing dynamic P/E ratio at 73x and 60x based on current share price of Rmb8.04; “Neutral” rating is temporarily given.
Potential risks: 1) Uncertainty in operation of new production base.