In the first three quarters of 2008, the company realized operating revenue of Rmb1.336bn (+60.8% yoy), operating profit of Rmb180mn (+92.2% yoy); net profit attributable to parent of Rmb178mn (+80.9% yoy) and diluted EPS of Rmb0.28. For Q3 2008, the company produced operating revenue of Rmb408mn (+2.5% yoy) and net profit attributable to parent of Rmb66.35mn (+0.7% yoy).
Slight growth in operating revenue of Q3 2008 was mainly due to combined statements for special steel and steel business in the same period of 2007; if this factor excluded, operating revenue of Q3 2008 was predicted to rise by around 50% yoy. Besides, gross margin and period expense rate were also influenced by combined statements. Non-operating revenue of Q1-Q3 2008 totaled Rmb3.65mn (-27.6% yoy). We predict 2008-2010E EPS to be Rmb0.43, Rmb0.52 and Rmb0.62, representing P/E ratio of 14x, 12x and 10x respectively. The company mainly relies on telecommunication, security and media, and also plays roles of telecom operator, service supplier and media communicator; thus it has quite steady revenue source, and the revenue is likely to grow steadily, we keep “Overweight” rating for the counter.