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Recently, we have conducted a research on Guangdong Shaoneng Group (000601). The company is specialized in the power industry. As of the end of 2007, the holding installation capacity of the company was 764,610 kilowatts, of which hydropower accounted for 52%. In the aspect of distribution area, Guangdong Province accounted to 61% and the rest was in Hunan Province. In addition to the power business, the company is also one of the largest cement producers in northern Guangdong. In recent years, the company has raised the investment in power business, particularly in high-margin hydropower projects. The company will continue to expand hydropower business, raise the proportion of hydropower with paper product business and auto parts business as the auxiliary services and gradually withdraw from other businesses. 2008-2009 EPS is expected to be Rmb0.11 and Rmb0.13 respectively with the corresponding PER at 38x and 32x. NEUTRAL rating is given.