In 07, the operating revenue was 1.31 billion yuan, an increase of 116 percent yoy; net profit attributable to the parent company: 168 million yuan, an increase of 2,339 percent yoy; earnings per share: 0.32 yuan, slightly higher than our forecast of 0.29 yuan but basically in line with our expectations; distribution plan: 0.25 yuan (before tax) for each 10 shares.
Comments: the substantial revenue growth was brought by the company’s non-public offering raising 700 million yuan in May of 07 added to its own 70 million yuan which was used to the acquisition of 100 percent holdings of Beijing Teletron Telecom Engineering Co., ltd. In addition, the company also carried out five other acquisitions which made small contribution to its profit, but after the acquisition, network coverage was expanded. Dr. Peng’s layout of the business was preliminarily formed, namely developing comprehensive value-added telecom services (including IDC room, broadband access, hotel multimedia, network monitoring, network media, etc.) relying on the MAN of Beijing. We believe that company's focus has been highlighted and is of monopoly. We raise the profit forecast of company in 08, from 0.64 yuan to 0.73 yuan, and EPS is expected to be 0.99 yuan in 09. "Overweight" rating is reiterated.