In Q1 2009, the company reported business turnover of Rmb8474mn (+13.9% yoy), net profit attributable to owners of parent of Rmb191mn (+221.2% yoy), and diluted EPS of Rmb0.032.
We forecast its 2009-2010E EPS to be Rmb0.21 and Rmb0.23, representing dynamic P/E ratio at 23x and 21x based on closing price of April 28, 2009. Its valuation is reasonable, thus “Neutral” rating is temporarily maintained. Investors are suggested paying attention to regional electric power recovery progress with Shandong province as main focus, and investment opportunities brought by coal price decline.