Excerpts:

The report analyzed domestic veterinary pharmaceutical market and indicated the development trend of policy and market aspects as well as three industrial orientations in the future. Positive adjustments have been made in 08 on business structure of animal vaccine, veterinary pharmaceutical and feedstuff trading. To enhance strong points and avoid weaknesses, the company enjoyed a great surge in profitability, an over 60% increase yoy. Thereinto, compulsory immunity vaccine in vaccine business maintained steady growth. Besides, we hold optimistic view on rabies vaccine business, and feedstuff and veterinary pharmaceutical businesses are expected to turnaround into profit. Risks rest with product risk and periodic fluctuation of stockbreeding. We forecast EPS 08-10E to be Rmb0.68, Rmb0.76 and Rmb0.89 respectively. Based on absolute evaluation, fair price stood at Rmb20.22, implying fair share price of Rmb22.8, with certain space to soar comparing with the secondary market. Reiterate "Overweight" rating for the counter.