Excerpts:

In 2007, the company achieved annual revenue of 18.07 billion yuan, up 29.2 percent yoy; net profit attributable to the parent company: 380 million yuan, up 592.1 percent yoy; diluted earnings per share: 0.42 yuan, basically in line with our forecast of 0.40 yuan. Distribution plan: 3 shares transferred for each 10 shares. The company transferred 50 percent holdings of Beijing Gaosheng Real Estate Development Company and received the investment income of 273 million yuan, which was the main reason for the substantial growth of the company and would enhance the EPS of 2007 by 0.30 yuan. The company was maintaining rapid growth. Without the impact of investment income on the net profit taken into consideration, the net profit of 2007 was 107 million yuan, an increase of 108.2 percent yoy. Real estate business is an important factor of the company’s future upgrading. It is expected that in the future China Railway Erju group will gradually inject land reserves into China Railway Erju, the proportion of the company's real estate revenue in the total operating revenue will gradually improve. The EPS (not diluted) will be 0.68 yuan, 0.90 yuan and 1.18 yuan respectively in 2008-2010. Given the rapid growth of the company's real estate business as well as the reorganization expectation, "overweight" rating is reiterated.