As shown in Q1 2009 report, during the period under view, it realized business turnover of Rmb2804mn (+2.81% yoy), operating profit of Rmb18.64mn (+1.81% yoy), net profit attributable to parent of Rmb10.24mn (+0.55% yoy), and basic EPS of Rmb0.041.
Earning forecast and rating: We predict its 2009-2010E EPS to be Rmb0.20 and Rmb0.28, representing dynamic P/E ratio at 40x and 29x based on current share price of Rmb7.89. Given its regional bellwether position, it is likely to benefit from medical reform, moreover, its business innovation ability is strong, thus “Overweight” rating is hereby maintained.
Potential risks: 1) Uncertainty of medical reform; 2) Comparatively high liability ratio.