Event
The company released its 2008 annual report, according to which it realized business turnover of Rmb1220.529222757mn (+0.3% yoy), total profit of Rmb280,845,894.52 (+9.51% yoy), and profit attributable to shareholders of listed company of Rmb250,817,154.35 (+21.11% yoy), and the company planned to distribute dividend cash of Rmb0.5 for every ten shares.
Meanwhile, in Q1 2009, it reported business turnover of Rmb2.6bn (-15.14% yoy), profit attributable to shareholders of listed company of Rmb40mn (-14.52% yoy), and EPS of Rmb0.033.
Our Analysis and Estimation
Its performance in 2008 was in line with our expectation.
Its total sales revenue in 2008 saw slight increase and achieved Rmb12.2bn.
It strengthened stock risk control ability.
Investment Suggestion
Up-stream extension strategy will be helpful to its sales growth and improvement of profitability. According to our valuation module, we predict its 2009-2011E EPS to be Rmb0.23, Rmb0.26 and Rmb0.32, representing dynamic P/E ratio at 21.8x, 19.7x and 16.1x. “Cautious” rating is hereby maintained.