The company hardly has any risks from selling of the small-portioned non-tradable shares within two years.
Its energy-saving & emission reduction product, exhaust heat boiler is key recommendation by the government.
The company mainly engages in exhaust heat boiler products, and annual growth in 2009-2010 will not be below 20%. Moreover, continuously surging nuclear pressure equipment indents will pad the company’s EPS. We predict its 2009-2010E EPS after share-add-issuance to be Rmb0.72 and Rmb0.94, representing dynamic P/E ratio at 36x and 27x based on share price of Rmb27. “Overweight” rating is hereby maintained.
Potential risks: 1) Downstream industries maintained sluggish, and 2) Abnormity impulse during nuclear power station construction process.