Event
We conducted on-site survey of the company on May 20, 2009, which showed that the company was busy with nylon zipper business currently, and button production was also on its way; overall production status had returned to pattern prior to the crisis.
Our Analysis and Estimation
1. The company is busy with nylon zipper business.
2. Button production is comparatively busy.
3. Crystal stone business is still in secret.
4. The company keeps close attention to its clients.
Earning Forecast and Investment Suggestion
We predict the company’s 2009-2010E revenue to be Rmb1.646bn (+11.43% yoy) and Rmb1.910bn (+16.01% yoy), net profit to be Rmb183.9mn (+17.6% yoy) and Rmb220.2mn (+19.7% yoy) respectively with EPS at Rmb0.91 and Rmb1.09. Based on the company’s cash flow and potential growth as well as current average evaluation, we deem its implied value at Rmb18.2 according to 2009 evaluation of 20x. “Recommended” rating is hereby given.