We made an on-site investigation to China Wuzhen, a famous tourist site from April 27th-28th 2009, through which we hold that it is a place which owns favorable climate, ideal geographical location and high popularity and has become the pioneer of tourist regions in China. Given analysis above, we consider China Wuzhen will surly become one ace for the company’s further development.
Based on prominent development expectation, we hereby upgrade its 2009-2011E EPS to Rmb0.41, Rmb0.60 and Rmb0.67 respectively, and consider dynamic P/E ratio of 30x to be reasonable. Its dynamic P/E ratio in 2010 is only at 20x based on closing price of Rmb11.67 on May 6, 2009, which is far below that of the sector average, thus we upgrade its rating to “Buy”.