The company is the largest manufacturer of carbon black. In 2008, its total capacity reported 0.3mn; since 2002, its capacity has been enlarged to 5 times the amount of 2002, with market share increment at 6% (from 5% to 11%), being top of the whole industry.
We predict its 2009-2010E EPS to be Rmb0.29 and Rmb0.54, representing dynamic P/E ratio at 28x and 15x based on closing price of Rmb8.24 on June 11, 2009. “Overweight” rating is hereby maintained.