China A shares: Co Visit Guidebook - Ping An Insurance WEICHAI POWER CO., LTD. { “Great Weichai” has a Great Development } Visit Summary (Date: 28 Dec. 2008) ¾ The construction

China A shares: Co Visit Guidebook

Ping An National Presence

QFII - ‘Your PAth to China’

Ping An Securities Company Ltd.

PING AN SECURITIES COMPANY LTD.

Contents

Part 1: Shenzhen listed companies:

WEICHAI POWER (000338.SZ)………………………………………………………………………………………………..1 BAIYUNSHAN PHARMACEUTICAL (000522.SZ) ………………………………………………………………………….2 HAINAN HAIYAO (000566.SZ)………………………………………………………………………………………………..3 SHANDONG HELON (000677.SZ)…………………………………………………………………………………………….4 CNHTC JINAN TRUCK (000951) ……………………………………………………………………………………………..5 RONGXIN POWER ELECTRONIC (002123.SZ) ……………………………………………………………………………..6 MAANSHAN FANGYUAN SLEWING RING(002147.SZ)…………………………………………………………………...7 HONGBAOLI (002165.SZ) …………………………………………………………………......................................................8 GOLDWIND SCIENCE&TECHNOLOGY (002202.SZ)…………………………………………………………………........9 HAILIDE NEW MATERIAL (002206.SZ)………………………………………………………………….............................10 HONGDA NEW MATERIAL (002211.SZ)…………………………………………………………………............................11 TALKWEB INFORMATION SYSTEM (002261.SZ)…………………………………………………………………............12 NHWA PHARMACEUTICAL (002262)…………………………………………………………………................................13 DA AN GENE (002030)………………………………………………………………………………………………………..14 SHAANXI PROVINCIAL NATURAL GAS (002267)…………………………………………………………………..........15

Part 2: Shanghai listed companies DOUBLE-CRANE PHARMACEUTICAL (600062.SH)………………………………………………………………….......16 NANJING CENTRALEMPORIUM (600280.SH)……………………………………………………………………………..17 HUAFA INDUSTRIAL SHARE (600325.SH)…………………………………………………………………........................18 WUXI COMMERCIAL MANSION GRAND ORIENT (600327.SH)………………………………………………………..19 KEDA INDUSTRIAL (600499.SH)…………………………………………………………………........................................20 XI’AN AERO-ENGINE (600893.SH)………………………………………………………………….....................................21 WENSHAN ELECTRIC POWER (600995.SH)………………………………………………………………….....................22 GEM-YEAR INDUSTRIAL (601002.SH)……………………………………………………………………………………..23 DAQIN RAILWAY. (601006.SH)…………………………………………………………………............................................24 CHINA PACIFIC INSURANCE (601601.SH)…………………………………………………………………........................25

PING AN SECURITIES This is prepared for clients of Ping An Securities Company Ltd. and other professionals. The information and points contained herein do not form bids or inquiries of the said securities and are only for reference.

PING AN SECURITIES COMPANY LTD. Company Visit Note /公司调研报告

PING AN SECURITIES Contact: [email protected] This is prepared for clients of Ping An Securities Company Ltd. and other professionals. The information and points contained herein do not form bids or inquiries of the said securities and are only for reference.

Sector: Autos

Analysts: Yu Bing (余兵) & Wang De’an (王德安)

潍柴动力股份有限公司 WEICHAI POWER CO., LTD.

{ “Great Weichai” has a Great Development }

Visit Summary (Date: 28 Dec. 2008)

The construction machinery and heavy truck industries, the major downstream industries of the company, will recover earlier than the macro-economy, boosted by investments.

The company, with the most complete industrial chain of heavy trucks at home, has three advantages: strategic equity structure, synergy under independent operations, and big growth under a large market share.

Its operating income is expected to grow at a rate of 12.79%, 6.1% and 12% respectively in 2008-2010, with EPS forecast at RMB 2.39, 2.74 and 3.45 respectively, in light of our judgments on the sector and the company. The company’s share price is around the margin of safety as DCF valuation shows its fair price is at RMB 32.15; PB method confirms its margin of safety at RMB 17.44 and PE method reveals its fair range at RMB 19.12-35.85.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 5282.84 6682.90 29260.97 33,004.00 35,015.90 39,217.80Net profit (RMB mil.) 306.51 684.37 2019.41 1,990.90 2,278.50 2,870.50Net profit growth rate (%) -42.91 123.28 195.08 -1.40 14.40 26.00EPS (RMB) 0.93 2.07 3.88 2.39 2.74 3.45P/E (x) 0.00 0.00 22.33 7.83 6.8275 5.42Dividend yield (%) 0.00 5.78 15.83 10.58 11.43 14.49

Management Information Major Shareholders & Type of Shares Chairman Tan Xuguang Name Type %CFO Zhang Yuanfu HKSCC Nominees Limited Foreign shareholder 24.23Co Sec. Dai Lixin Weichai Holding Group State-owned legal person 14.91Tel. 86-536-2297068 Peterson Group Overseas legal person 4.51Website www.weichai.com

Shenzhen Capital Group Domestic legal person 4.13

Code: 000338.SZ Rating: Strong Buy


PING AN SECURITIES [email protected] This is prepared for clients of Ping An Securities Company Ltd. and other professionals. The information and points contained herein do not form bids or inquiries of the said securities and are only for reference.

Sector: Pharmaceuticals Analyst: Liao Wanguo (廖万国)

广州白云山制药股份有限公司

GUANGZHOU BAIYUNSHAN PHARMACEUTICAL CO. { A Recovery Growth to be Seen in 2009 }

Visit Summary (Date: 21 Jan. 2009)

The company saw its performance significantly drop in the first 3 quarters of 2008. In our view, poor results of its subsidiaries was the main reason, and a nearly 30% jump in its financial expenses was another main reason.

The company’s operating performance is likely to recover in 2009 as we believe its subsidiaries would turn for the better. In particular, Baiyunshan Pharmaceutical Factory and Hutchison Whampoa Guangzhou Baiyunshan, main contributors to the company’s profit, will keep growing at a relatively high rate in 2009 due to their brand advantages and normative managements. A sharp decline in its financial expenses is another key factor driving the company’s recovery.

Prospects for its performance improvement are expectable though its short-term valuation remains high. Its EPS is expected to be RMB 0.18 and 0.27 respectively for 2008 and 2009, representing a 32.83x and 21.88x PE respectively.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 2816.64 2742.37 2959.21 2,662.20 2,998.30 3,354.60Net profit (RMB mil.) 50.48 14.87 144.51 110.80 147.10 173.60Net profit growth rate (%) 39.56 -70.54 871.72 -34.10 51.80 18.80EPS (RMB) 0.13 0.03 0.31 0.18 0.27 0.33P/E (x) 31.30 105.66 47.32 32.83 21.88 17.91Dividend yield (%) 0.00 0.00 0.19 - - -

Management Information Major Shareholders & Type of Shares Chairman Xie Bin Name Type %CFO Huang Zhiling Guangzhou Pharmaceutical Holdings State-owned shareholder 35.37Co Sec. Qiao Yong Jiang Fei Others 8.95Tel. 86-20-87062599 Da Cheng Wealth Management Fund Others 2.61Website www.gzbys.com

BoC Sustained Growth Equity Fund Others 2.29

Code: 000522.SZ Rating: Buy



Sector: Pharmaceuticals Analyst: Liao Wanguo (廖万国)

海南海药股份有限公司

HAINAN HAIYAO CO., LTD. { Operation Continuously Better; Profitability Significantly Improved }

Visit Summary (Date: 1 Mar. 2009)

After six years of restructuring, the company began to develop fast in 2008. Its new and special medicine is expected to grow at a rate higher than 30% and ordinary medicine and APIs are expected to grow at a rate around 100% in 2008 and 2009.

The company carried out equity incentives to middle and senior executives and sales teams in 2007, which undoubtedly would significantly raise the whole team’s enthusiasm and cohesion, thus stabilizing its sustained and rapid development.

The company invested no more than RMB 50 million to occupy a stake of about 25% in the electronic cochlea project estimated to start sales at end of 2009, which would lift its EPS by no less than RMB 0.06, 0.12 and 0.21 respectively for 2010, 2011 and 2012.

Its EPS is expected to be RMB 0.21 and RMB 0.50 respectively for 2008 and 2009, representing 49x and 21x PE. As a pharmaceutical maker with operation continuously better and profitability sharply improved, currently 21x valuation is obviously low. If calculated as per 30x PE, at least a 40% upside is on the cards.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 210.27 213.59 241.72 401.4 725.3 1,005.0Net profit (RMB mil.) 21.74 24.55 -33.90 43.7 105.0 118.6Net profit growth rate (%) -12.96 12.92 -238.09 228.8 143.6 31.8EPS (RMB) 0.11 0.12 -0.17 0.21 0.50 0.66P/E (x) 26.06 31.48 -52.52 49.5 20.8 15.7

Management Information Major Shareholders & Type of Shares Chairman Liu Xicheng Name Type %CFO Wang Gang Shenzhen Nanfang Tongzheng Others 20.34Co Sec. Zhang Hui Haikou Fuhaifu Investment Co. Others 9.30Tel. 86-898-66785861 Tongqian Securities Investment Fund Tradable shares 4.75Website www.haiyao.com.cn

BOC-Harvest Theme Enhanced Fund Tradable shares 2.84




Sector: Chemicals Analyst: Wu Linlin (吴琳琳)

山东海龙股份有限公司

SHANDONG HELON CO., LTD. { Viscose Demand Recovers Near Term; Differentiation Highlights Company Value }


Viscose prices were at bottom, which we believe could inspire release of the potential demand of viscose fiber to some extent. Completion of de-inventory in downstream and seasonal demand will also lead to a rally in short-term demand.

The company is the second largest production base of viscose staple fiber and the largest producer of polyester tire cord fabric and canvas at home. It could keep a better rate of operation and enjoy a higher gross profit margin in the industry in a trough period as it had domestically leading advantages in scale and cost and continued to develop differentiated viscose staple fiber based on ordinary viscose fiber. The rally in viscose staple fiber prices recently is positive to an increase in earnings of the company’s products.

Its EPS is expected to be RMB 0.07, 0.19 and 0.30 respectively for 2008, 2009 and 2010. “BUY” rating is reiterated given its higher R&D level, differentiated viscose staple fiber being high-end oriented and better profitability highlighting the company’s value in a sector trough.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 2109.66 2475.14 3119.75 3,163.23 3,613.73 4,500.44 Net profit (RMB mil.) 80.79 70.55 276.35 52.84 103.32 188.26 Net profit growth rate (%) -25.89 -12.68 291.71 -80.88 95.55 82.21EPS (RMB) 0.09 0.08 0.32 0.07 0.19 0.30P/E (x) 42.22 47.50 11.88 54.29 20.00 12.67

Management Information Major Shareholders & Type of Shares Chairman Pang Fengjian Name Type %CFO Wang Limin Weifang Investment Co. State-owned legal person 16.24Co Sec. Xin Qing Weifang Kangyuan Investment Co. Domestic legal person 13.36Tel. 86-536-2275007 Shanghai Dongyin Investment Co. Domestic legal person 8.46Website www.helon.cn

Weifang Guanglan Investment Co. Domestic legal person 6.93


PING AN SECURITIES COMPANY LTD. Company Visit Report /公司调研报告


Sector: Autos

Analysts: Yu Bing (余兵) & Wang De’an (王德安)

CNHTC JINAN TRUCK CO., LTD. 中国重汽集团济南卡车股份有限公司

{ An Excellent Enterprise Turning Risks into Opportunities }

Management Information Major Shareholders & Type of Shares Chairman Wang Haotao Name Type (Shares) %CFO Wan Chunling Sinotruk (Hong Kong) Limited Overseas legal person 63.78Co Sec. Liu Bo ABC – Baoying Strategic Growth Fund Domestic legal person 1.81Tel. 86-531-85587588 PDB – Changxin Jinli Trend Fund Domestic legal person 1.75Website www.jntruck.com.cn

ICBC – E Fund Value Growth Mixed Domestic legal person 1.45

Visit Summary Date: 28 Jul. 2008; Venue: workshops of the company

Heavy trucks’ overdraft sales from advance upgrade and advance registration reached around 50,000-60,000 units in 1H08, accounting for 15% of the first-half sales. Sector volatility from switch to China III Emission Standards starting from 1 July is expected to end up at the end of Sept., and sales of heavy trucks would get right at the end of 3Q08.

The company has taken the opportunity of the switch period to expand its market share through the EGR heavy trucks with intellectual property rights that it initiated R&D in 2005, showing its flexible operating capability and prominent technical strength.

The company will launch new semi-trailers in 2H08 to breach the product mix bottleneck. Its EPS is expected to be RMB 2.05 and RMB 2.52 respectively in 2008 and 2009.

Ended 2005A 2006A 2007A 2008E 2009E 2010EDec. 31 Core business income (RMB mil.) 6506 9963 17335 23150 27540 31992 Net profit (RMB mil.) 150.64 263.79 717.48 861.64 1,055.31 1,279.94Net profit growth (%) -13.38 75.11% 171.99% 20.09% 22.48% 21.29%EPS (RMB) 0.36 0.63 1.71 2.05 2.52 3.05P/E (x) 59.44 33.97 12.51 10.44 8.49 7.02




Sector: Power Equipments

Analysts: He Benhu (何本虎)

RONGXIN POWER ELECTRONIC CO., LTD. 荣信电力电子股份有限公司

{ Long-term Value not Affected by Short-term Uncertainty }

Visit Summary (Date: 11 Nov. 2008)

The company boasts the most comprehensive technology among domestic peers, holding the products & technologies as SVC, MABZ & HVC, and occupies a 50% share in the SVC field.

About 70% of the company’s sales revenue is from the metallurgy field. Affected by domestic and international economic environments, steel enterprises have seen their operated capacity slump. An obvious fall in new and rebuilt product lines is expected. Since this target market contributes most to the company’s profit, thus the impact of the steel sector correction on the company’s profit cannot be neglected.

Its 2008-2010 EPS is expected to be RMB 0.96, 1.36 and 1.97 respectively, translating into 26x, 19x and 13x PE. From the PEG perspective, historical growth is maintained at around 50%; future growth trend is relatively certain; valuation remains superior. From the PE perspective, relative valuation advantage is unclear. We initiate a “BUY” rating given a broad market outlook for its leading products and a fixed growth trend.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 164 241 367 583 869 1225Net profit (RMB mil.) 35 51 83 123 174 252Net profit growth rate (%) - 43.2 64.2 47.5 41.2 45.2EPS (RMB) 0.28 0.40 0.65 0.96 1.36 1.97

Management Information Major Shareholders & Type of Shares Chairman Zuo Qiang Name Type (Shares) %CFO Long Hao IER Venture Capital Co. Domestic legal person 18.00Co Sec. Zhao Dianbo Zuo Qiang Domestic natural person 15.20Tel. 86-412-8223908 Tiantu Capital Co. Domestic legal person 9.38Website www.rxpe.com

Henan New Century Domestic legal person 4.49




Sector: Machinery

Analysts: Wang Hexu (王合绪)

MAANSHAN FANGYUAN SLEWING RING CO., LTD. 马鞍山方圆回转支承股份有限公司

{ The Certainty of Growth }

Visit Summary Date: 7 Nov. 2008

The company is one of the biggest domestic manufacturers of slewing rings. Capturing the high-end market controlled by foreign brands is the theme of growth for the company in 2009-2010. Negative impact of slowdown of the major downstream sector, construction machinery, on the company is limited.

Product mix upgrade and steel price fall will bolster gross profit margin. Higher end products, rise of emerging demand and expansion of international market will provide a broad stage for the company, ensuring its long-term growth.

We most conservatively forecast 2009 & 2010 EPS to be RMB 0.81 and RMB 1.05 respectively. Due to its growth certainty, we believe its PE should be at 12-14x in 2009 and its fair market price should be in RMB 9.72-11.34.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 102.38 156.03 255.86 401.00 631.40 809.60Net profit (RMB mil.) 11.27 30.60 65.77 97.13 151.57 197.33Net profit growth rate (%) -29.29 171.49 114.93 47.67 56.05 30.19EPS (RMB) 2.25 0.44 0.70 0.52 0.81 1.05P/E (x) 0.00 0.00 31.2 13.4 8.6 6.6Dividend (RMB) 0.00 0.00 0.96 0.73 1.14 1.49

Management Information Major Shareholders & Type of Shares Chairman Qian Senli Name Type (Shares) %CFO Zhuang Ronghua Qian Senli Domestic natural person 20.90Co Sec. Gao Haijun Yu Yunni Domestic natural person 6.37Tel. 86-555-3506900 Wang Henglei Domestic natural person 5.92Website www.masfy.com

Shen Tailai Domestic natural person 3.14




Sector: Chemicals Analyst: Cheng Lei (程磊)

南京红宝丽股份有限公司

NANJING HONGBAOLI CO., LTD. { Benefit from “Home Appliances to the Countryside” and Infrastructure Investment }


The company is a major domestic supplier of bicomponent polyether for rigid foam and one of the world’s major producers of isopropanolamine products.

The refrigerator industry is the biggest market consuming downstream demand of bicomponent polyether for rigid foam at present. Promotion of home appliances to the countryside will lead to a stable demand in bicomponent polyether for rigid foam. Isopropanolamine has a growing contribution to the company’s revenue and profit as its capacity utilization is increasing. This business will be a new impetus for the company’s leap-forward development.

Its EPS is expected to be RMB 0.59, 0.79 and 1.00 respectively in 2008-2010. We maintain a “STRONG BUY” rating given its businesses’ benefiting from the program of “home appliances to the countryside” and government investment and a high certainty in future stable growth.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 365 556 737 882 985 1,229 Net profit (RMB mil.) 15 31 56 66 89 112 Net profit growth rate (%) 110.06 80.27 18.07 35.22 25.74 EPS (RMB) 0.13 0.29 0.50 0.59 0.79 1.00 P/E (x) 104.50 47.72 27.60 23.37 17.28 13.75 Dividend yield (%) 0.00 0.00 2.19 0.43 0.58 0.73

Management Information Major Shareholders & Type of Shares Chairman Rui Jinggong Name Type %CFO Chen Sanding Jiangsu Baoyuan Investment Domestic legal person 26.72Co Sec. Liu Zuhou Lu Weidong Domestic natural person 7.87Tel. 86-25-57351388 Gaochun State-owned Assets State-owned legal person 5.71Website www.hongbaoli.com

Nanjing Hi-tech Venture Capital Co. State-owned legal person 5.53




Sector: Power Equipments

Analysts: He Benhu (何本虎)

XINJIANG GOLDWIND SCIENCE&TECHNOLOGY CO. 新疆金风科技股份有限公司

{ Value Curve from Overvaluation to Undervaluation }

Management Information Major Shareholders & Type of Shares Chairman Wu Gang Name Type (Shares) %CFO Yu Danke Xinjiang Wind Energy Liability Co. State-owned legal person 18.27Co Sec. Cai Xiaomei China Water Investment Corp. State-owned legal person 15.75Tel. 86-991-3767495 China – Belgium Private Equity Fund Social legal person 7.2Website www.goldwind.cn

Shenzhen Yuanjing Xinfeng Investmt. Social legal person 4.37

Visit Summary Date: 21 Aug. 2008

Its share price was involved in a deep correction from the end of July to early August, largely due to worse-than-expected interim results. However, it was able to digest cost rise pressure as its gross profit margin did not decline as sharply as the rise of raw materials.

Annually average increased installed capacity would reach 5 million kilowatts in 2009 and 2010, corresponding to a value of RMB 30 billion. As a domestic leader, the company enjoys a considerably optimistic outlook.

We forecast 2008-2010 EPS to be RMB 1.04, RMB 1.51 and RMB 2.17 respectively, translating to a 35-40x PE for 2008 and a 25-30x PE for 2009. Our target price is RMB 36-45, implying a 40%-plus upside from its current level.

Ended 2005A 2006A 2007A 2008E 2009E 2010EDec. 31 Core business income (RMB mil.) 505 1530 3103 7733 11779 15517Net profit (RMB mil.) 114 320 630 1040 1505 2171Net profit growth (%) 170.0 180.9 96.9 65.1 44.8 44.2EPS (RMB) 0.11 0.32 0.63 1.04 1.51 2.17P/E (x) 219 78 40 24 17 11




Sector: Chemicals

Analyst: Cheng Lei (程磊)

浙江海利得新材料股份有限公司 ZHEJIANG HAILIDE NEW MATERIAL CO., LTD.

{ Differentiation Ratio Increased; Benefited from Government Investment }

Management Information Major Shareholders & Type of Shares Chairman Gao Limin Name Type (Shares) %CFO Lv Peifen Gao Limin Domestic natural person 31.92Co Sec. Huang Weishu Tonglian Venture Capital Co. Domestic legal person 21.76Tel. 86-573-87989889 China – Belgium Private Equity Fund Domestic legal person 6.40Website www.hailide.com.cn

Song Zuying Domestic natural person 4.64


The company has managed to transform to a small company with prominent competitive advantage. Its competitiveness will be further enhanced along with implementation of its integrated vertical strategy based on its expansion.

The market of differential polyester yarns for industrial purposes is being occupied by domestic firms while overseas capacity has started to shrink due to aging facilities, low efficiency and high costs. Even in falling economies, shrinking demand would be less than falling supply, and the company could gain a bigger market share and buck the trend to achieve growth with its competitive advantage. The “winter plowing” will result in a “harvest” in an economic upturn along with construction of its new projects.

We expect its EPS at RMB 0.80, 1.10 and 1.51 respectively for 2008, 2009 and 2010 respectively, with a target price of RMB 18.00.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 706 718 866 1,112 1,334 1,698Net profit (RMB mil.) 43 72 82 100 138 188Net profit growth rate (%) 67.19 13.62 21.94 37.87 36.54EPS (RMB) 0.35 0.58 0.66 0.80 1.10 1.51P/E (x) 28.95 17.32 15.24 12.50 9.07 6.64P/B (x) 4.48 3.26 2.86 1.45 1.27 1.08 EV/EBITDA 11.19 10.58 10.84 5.46 4.90 3.73




Sector: Chemicals Analyst: Wu Linlin (吴琳琳)

江苏宏达新材料股份有限公司

JIANGSU HONGDA NEW MATERIAL CO., LTD. { Opportunities Available in the Crisis }


The company is one of the most competitive producers of heat cure rubbers at home. Its sales of heat cure rubbers are expected to reach around 27,000 tonnes in 2008, with a market share of 14%-15%.

A rapid rise in capacities led domestic organosilicon monomer industry’s profit to a fair level. As organosilicon monomer prices slumped, high-temperature organosilicons were stifled in prices and profits, thus the company suffered large pressure.

Upon completion of the 30,000-tonne high-temperature organosilicon project invested with the raised proceeds, doubling of its capacity could have some pressure on the company’s sales. However, FY09 is expected to see a breakthrough in sales as the company could position itself towards the credit sale clients using large quantities of heat cure rubbers, and it also attached importance to developing and prompting sales business.

Its EPS is estimated to be RMB 0.30 and RMB 0.42 respectively for 2009 and 2010. We initiate a “NEUTRAL” rating given it being one of the leading producers of heat cure rubbers at home, its product design flexibly meeting demand of downstream clients and its strong ability in market expansion.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 435.87 517.04 623.78 643.46 773 1087Net profit (RMB mil.) 39.32 48.28 85.35 47.63 72.56 108.84Net profit growth rate (%) 158.88 22.80 76.78 44.19 52.34 50.00EPS (RMB) 0.47 0.58 0.47 0.20 0.30 0.42

Management Information Major Shareholders & Type of Shares Chairman Zhu Dehong Name Type %CFO Guo Beiqiong Jiangsu Weilun Investment Domestic legal person 56.57Co Sec. Wang Yun Shi Jihong Domestic natural person 4.71Tel. 86-511-88222923 Ni Jifang Domestic natural person 4.61Website www.jshdxc.com

Guo Beiqiong Domestic natural person 3.09

Code: 002211.SZ Rating: Neutral



Sector: Telecoms

Analyst: Liu Jun (刘军)

湖南拓维信息系统股份有限公司 HUNAN TALKWEB INFORMATION SYSTEM CO., LTD.

{ A Seeker in the Cellphone Animation Industry }

Management Information Major Shareholders & Type of Shares Chairman Li Xinyu Name Type (Shares) QuantityCFO Xu Yutang BoComm – ABN Amro TEDA Fund RMB ordinary 1,324,776Co Sec. Xu Yutang ICBC – Baoying Growth Fund RMB ordinary 1,280,630Tel. 86-731-8668270 CCB – Yinhua Core Value Fund RMB ordinary 1,245,252Website www.talkweb.com.cn

ICBC – Hua’an SMEs Growth Fund RMB ordinary 1,233,711


The company’s core business is classified into system integration software business (30%) and wireless value-added business (70%). What primarily determines the company’s future value is the business outlook of cellphone animation.

The company leads the cellphone animation industry, but its current development is limited by such aspects as network speed, cellphone terminal and business mode. The cellphone animation industry remains in constant changes, and big changes are also likely in the industrial chain and the competitive pattern.

We estimate 2008-2010 basic EPS at RMB 0.99, 1.19 and 1.40 respectively. Its relative valuation is moderate. However, given a big room for development of the animation industry and the wireless value-added business where the company is placed, and the opportunities facing from 3G commercialization in 2009, we believe the company would have growth worthy of attentions.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 136.89 163.44 233.47 268.49 349.03 453.74Net profit (RMB mil.) 32.91 50.11 63.31 78.93 95.40 111.53Net profit growth rate (%) 104.89 52.24 26.36 24.67 20.87 16.90EPS (RMB) 0.41 0.63 0.79 0.99 1.19 1.40P/E (x) 44.3 28.8 23.0 18.4 15.3 13.0




Sector: Pharmaceuticals

Analyst: Liao Wanguo (廖万国)

JIANGSU NHWA PHARMACEUTICAL CO., LTD. 江苏恩华药业股份有限公司

{ A Chinese Listed Pharm. Co. Uniquely Focusing on Neuropsychic Drugs Market }

Management Information Major Shareholders & Type of Shares Chairman Sun Pengsheng Name Type (Shares) Number (Shares)CFO Gao Aihao Zhang Jianhua RMB ordinary 1,500,039Co Sec. - Social Security Fund 101 RMB ordinary 1,392,902Tel. 86-516-87767115 Song Hongyun RMB ordinary 924,695Website www.nhwa-group.com

Fei Zhe RMB ordinary 890,000

Visit Summary Date: 22 Oct. 2008

Its narcotic products, with gross profit margin of 88% and gross profit contribution of 40%, would achieve an annual growth rate of 35%.

Antischizophrenic drugs, with gross profit margin of 79% and gross profit contribution of 32%, would at least maintain an annual growth rate of 25%.

The company’s 1st-graded new drug, iptakalim hydrochloride, is expected to get a certificate in the first half of 2009; its performance after launch remains to be observed; it is difficult to make an accurate forecast now.

Sales revenue is expected to reach RMB 973 million and RMB 1,185 million respectively and net profit is estimated to be RMB 40.36 million and RMB 50.47 million respectively for 2008 and 2009; EPS is forecast to be RMB 0.336 and RMB 0.42 respectively, translating into 29x and 23x PE.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010EOperating income (RMB mil.) 638.84 695.84 804.83 973.7 1185.9 1407.9 Net profit (RMB mil.) 16.82 16.98 26.66 40.36 50.47 61.05 Net profit growth rate (%) 0.95 56.95 51.37 25.06 20.97EPS (RMB) 0.14 0.14 0.22 0.336 0.42 0.51P/E (x) 0.00 0.00 44.11 29 23 19




Sector: Pharmaceuticals

Analysts: Du Dongsong (杜冬松) & Yang Xiaohao (杨晓昊)

DA AN GENE CO., LTD. OF SUN YAT-SEN UNIVERSITY 中山大学达安基因股份有限公司

{ A High-tech Leader in the Full Diagnostic Reagent Field }

Management Information Major Shareholders & Type of Shares Chairman He Yunshao Name Type (Shares) %CFO Yang Enlin Guangzhou Zhongda Holding State-owned legal person 20Co Sec. Zhang Bin Guangzhou Bioengineering Center State-owned legal person 15Tel. 86-20-32290420 HongTa Venture Capital Investment Domestic legal person 3.19Website www.daangene.com

BOC – Fortune SGAM Growth Fund Domestic legal person 2.49

Visit Summary Date: 29 Jul. 2008; Venue: R&D center; clinical laboratory

The company’s R&D center is strong and market oriented; its product lines are complete and reserves are abundant; it managed to transform its marketing system and grasped mature client network resources.

Its clinical laboratory would see a rapid growth on strategic investor entry. Its performance would grow by over 35% in 2008.

As an integrated bio-pharmaceutical high-tech enterprise with the nucleic acid diagnosis technology being dominant, the company enjoys a better growth with sustained and stable operation and profitability. We are very optimistic on its future.

Ended 2005A 2006A 2007A 2008E 2009E 2010EDec. 31 Core business income (RMB mil.) 162.47 172.54 207.14 276.00 344.00 447.00 Net profit (RMB mil.) 26.30 28.62 34.90 47.08 62.48 81.44 Net profit growth (%) -12.48 8.84% 21.94% 37.89% 35.73% 38.34%EPS (RMB) 0.13 0.14 0.17 0.24 0.33 0.45P/E (x) 77.62 72.07 69.77 41.62 30.83 22.34




Sector: Petrochemicals

Analyst: Zhang Guojun (张国君)

陕西省天然气股份有限公司 SHAANXI PROVINCIAL NATURAL GAS CO., LTD.

{ Internal Growth Still Central in the Future }

Management Information Major Shareholders & Type of Shares Chairman Yuan Xiaoning Name Type (Shares) Quantity (Shares)CFO Nie Xizong CCB – Yinhua Core Value Fund RMB ordinary 17,356,529Co Sec. Li Qianyi BoComm – Fortis Haitong Fund RMB ordinary 3,919,321Tel. 86-29-86156119 CCB – BOSERA Theme Fund RMB ordinary 2,891,553Website www.shaanxigas.com

Tianhua Securities Invstmt. Fund RMB ordinary 2,493,715


The company’s operating income is largely from sales of natural gas and collection of pipeline transmission fees. However, as the sales price of natural gas is the same as the purchasing price, thus its profit is mainly from pipeline transmission fees. In our view, increases in gas supplies and pipeline mileages would continue to be a main contributor to the company’s future performance growth.

We expect 2008-2009 EPS at RMB 0.57 and 0.67 respectively. Given its stable growth and receiving nearly no influence from the economic cycle, we believe an 18-20x PE is fair. Based on 2008 results, its fair value should be at RMB 10.26-11.40.

In our view, the company is a good defensive play as its operating cash flow is abundant and its profitability is hardly affected by the economic cycle. Upside is little in near term as its current valuation has gone into a fair range. We initiate a “BUY” rating given certainty and stability of its future growth.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 1102.76 1354.42 1578.70 1808.70 2062.50 2523.50Net profit (RMB mil.) 124.29 204.14 253.85 289.40 343.00 440.10Net profit growth rate (%) 64.24 24.35 14.00 18.50 28.30EPS (RMB) 0.30 0.50 0.62 0.57 0.67 0.87P/E (x) 0.00 0.00 0.00 18.58 15.81 12.17




Sector: Pharmaceuticals Analysts: Liao Wanguo (廖万国)

北京双鹤药业股份有限公司

BEIJING DOUBLE-CRANE PHARMACEUTICAL CO. LTD. { Core Business Prominent; Growth Potential Enormous }


Through peeling off bad assets and focusing on the pharmaceuticals industry, the company’s core business sees its profit margin rising. The company has basically completed the national layout of big transfusion and has significantly raised output of transfusion in plastic bottles/bags with higher gross profit margin.

Benefited from the health care reform, the company’s first largest brand in terms of cardiovascular drugs, Hypotensor No. 0, is expected to achieve a high growth. The company has stepped up efforts in developing new products, ensuring its sustainable development.

Its EPS is forecast to be RMB 0.76/0.87, 1.05/1.15 and 1.35/1.49 respectively in 2008-2010, calculated on the tax rate of 25% and 15% respectively, representing dynamic PE of 33.75/29.48x, 24.43/22.3x and 19/17.2x respectively. Its core-business profit is expected to have a compound growth rate of 29% in the 3 years. “STRONG BUY” rating is retained given its clear core business, good growth and compelling valuation.

Ended (Dec. 31) 2007 2008E 2009E 2010ECore business revenue (RMB mil.) 4556.62 5,115.20 5,906.90 6,840.30Growth rate 12.54% 12.26% 15.48% 15.80%Net profit (RMB mil.; based on a tax rate of 25%) 438.4 363.7 499.6 643.7Growth rate 165.37% -17.04% 37.36% 28.85%EPS (RMB) 0.99 0.76 1.05 1.35

Management Information Major Shareholders & Type of Shares Chairman Wei Huacheng Name Type %CFO Huang Yunlong Beijing Pharmaceutical Group Co. State-owned legal person 49.05Co Sec. Zhu Dacheng CMBC-Huashang Advanced Fund Others 1.47Tel. 86-10-64742227-653 ICBC-E Fund Value Growth Fund Others 1.45Website www.dcpc.com.cn

ABC-Dacheng Enhanced Fund Others 1.41

Code: 600062.SH Rating: Strong Buy



Sector: Commerce & Trade Analysts: Qu Yongxiang (瞿永祥) & Wang Liting (汪立亭)

南京中央商场（集团）股份有限公司

NANJING CENTRALEMPORIUM (GROUP) STOCKS CO. { Likely Activated by the Restructuring }


Yurun has substantively controlled the company and has dispatched a general manager experienced in department-store management to the company. Improvement in corporate governance will drive the company to restructure itself targeting a better performance.

The real estate business will contribute less to the company in two years. Its major property projects may start to be settled in 2010, but its revenue and profit from real estates will face uncertainty given weakness of the real estate market.

Its EPS is expected to be RMB 0.23 and 0.37 in 2008-2009 respectively, representing 30.5x and 18.5x dynamic PE respectively. The company’s valuation is relatively high in 2008, but we believe it would remain one of the companies worthy of key attentions in the market given the huge room for its management improvement and the great potential for its performance growth.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 2,842.8 3,094.1 3,605.4 4,415.3 5,019.5 5,744.3Net profit (RMB mil.) 44.40 25.21 43.13 38.20 61.74 152.44Net profit growth rate (%) (5.23) (40.59) 59.19 (27.94) 61.61 146.90EPS (RMB) 0.34 0.20 0.32 0.23 0.37 0.91P/E (x) 20.78 34.98 21.97 30.49 18.87 7.64Dividend yield (%) 0.60 1.00 0.63 0.45 0.45 0.45

Management Information Major Shareholders & Type of Shares Chairman Hu Xiaojun Name Type %CFO Yang Xueping Yurun Dihua Group Domestic legal person 29.49Co Sec. Yang Xueping Nanjing State-owned Assets Operation State-owned 15.72Tel. 86-25-84728470 Nanjing Zhongtian Investment Domestic legal person 6.79Website www.njzysc.com

CCB-China International Advanced Fd. Others 4.88

Code: 600280.SH Rating: Buy



Sector: Real Estate

Analyst: Liu Xihui (刘细辉)

HUAFA INDUSTRIAL SHARE CO., LTD. 珠海华发实业股份有限公司

{ How the Newly Supplied Buildings to be Digested }

Management Information Major Shareholders & Type of Shares Chairman Yuan Xiaobo Name Type (Shares) %CFO Yu Weiguo Huafa Group State-owned legal person 21.90Co Sec. Xie Wei Harvest Stable Open-end Fund Unknown 2.85Tel. 86-756-8282938 Guangfa Jufeng Equity Fund Unknown 2.84Website www.cnhuafas.com

Hua’an Hongli Equity Fund Unknown 2.69

Visit Summary Date: 12 Sept. 2008

Demand from Macao clients firmly bolsters the property market in Zhuhai. Good urban environment and low housing prices should be major reasons why Macao clients buy houses in Zhuhai for self-use and vacation. They are mainly 36-45 years old, and their demand is stable.

The company has abundant advantages to digest any new building to be supplied and combat any possible market adjustment though supplies will rise in the near term in Zhuhai and three projects of the company totalling 450,000 square meters will be presold.

We lower our forecast on 2008-2009 EPS by 6.7% and 9.6% respectively to RMB 0.84 and RMB 1.22 respectively with 2008 net asset revaluated to be RMB 14.51 given slightly-slower-than-expected settlement in Century Town Phase II and possible slowdown in sales of New Town Phase V.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009EOperating income (RMB mil.) 714 839 2,166 3,605 5,957Net profit (RMB mil.) 129 142 363 683 996Net profit growth rate (%) 50.14 10.44 155.05 88.35 45.77EPS (RMB) 0.16 0.17 0.44 0.84 1.22P/E (x) 58.1 52.6 20.6 11.0 7.5




Sector: Commerce & Trade

Analyst: Qu Yongxiang (瞿永祥)

无锡商业大厦大东方股份有限公司 WUXI COMMERCIAL MANSION GRAND ORIENT CO. LTD.

{ Positive Factors Offset Negative Factors; High Growth Likely }


The company has strengthened its competitive advantage by completing expansion and decoration earlier than its rivals, introducing 1st-tier brands and developing membership clients with great efforts.

The company will receive little hit from the economic downturn given purchasing power of ordinary consumers, brand recognition and competitive advantage of the commercial mansion and sales features of 1st-tier international brands.

The company will be inevitably influenced by the metro construction, but bidirectional customer flows and relative advantage of the commercial mansion in the irreplaceable Zhongshan Rd. shopping area convince us not to be so pessimistic.

2008 and 2009 EPS is forecast to be RMB 0.36 and 0.48 respectively, representing 18.5x and 13.8x dynamic PE respectively. We are optimistic to its performance growth in next two to three years given the good trend of its department store business and the autos business’s benefiting from the benign competition after merger with New Era Co..

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 2936.70 3210.68 3344.19 4,276.4 5,151.5 5,369.2Net profit (RMB mil.) 85.54 73.23 84.03 135.50 180.98 231.25Net profit growth rate (%) 19.53 -14.39 14.74 36.18 33.56 27.78EPS (RMB) 0.39 0.22 0.26 0.36 0.48 0.61P/E (x) 15.40 38.69 54.71 18.46 13.82 10.82

Management Information Major Shareholders & Type of Shares Chairman Pan Xiaoyan Name Type %CFO Xi Guoliang Wuxi Commercial Mansion Group Domestic legal person 47.93Co Sec. Chen Hui Wuxi Commercial Industry Co. Domestic legal person 3.41Tel. 86-510-82702093 CCB-Fortune SGAM Growth Fund Others 2.88Website www.eastall.com

ICBC-Hua’an Small/Mid Cap Fund Others 2.85




Sector: Chemicals

Analyst: Zhang Guojun (张国君)

KEDA INDUSTRIAL CO., LTD. 广东科达机电股份有限公司

{ Clean Energy Project Already Commercialized }


Different from ordinary coal chemicals projects, the company’s CFBC “Clean Energy System” primarily produces low-heat value gas and its biggest feature is environmental protection. It is also less impacted by declines in oil and coal prices.

New countryside construction will provide the company a chance for development. Recent years of rapid growth of construction ceramics is largely driven by the countryside market. Now, the government has attached unprecedented importance to issues concerning agriculture, countryside and farmers. The company’s core business will benefit from it.

Despite worsening internal & external economies, we believe abundant cash flow could enable the company to tide over the cold winter. Besides, the development room of the new business is huge, which may bring steadily high profits to the company in the future. We upgrade 2008 EPS forecast to RMB 0.48. 2009-2010 EPSwould be above RMB 0.70 and 1.20 respectively.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 560.2 821.6 1263.5 1516.2 2242.2 3794.2Net profit (RMB mil.) 40.1 45.6 93.7 174.9 238.0 422.1Net profit growth rate (%) -20.7 13.6 105.6 86.6 36.1 77.3EPS (RMB) 0.4 0.3 0.6 0.5 0.7 1.2P/E (x) 17.5 18.9 40.7 10.7 7.2 4.1

Management Information Major Shareholders & Type of Shares Chairman Bian Cheng Name Type (Shares) %CFO Zhou Hehua Lu Qin Domestic natural person 20.49Co Sec. Zhou Hehua Bian Cheng Domestic natural person 8.84Tel. 86-757-23833869 Bao Jiejun Domestic natural person 3.93Website www.kedagroup.com

Shanghai Securities Co. Domestic legal person 2.64




Sector: Machinery

Analyst: Ye Guoji (叶国际)

XI’AN AERO-ENGINE CORPORATION LTD 西安航空动力股份有限公司

{ Troika of Qinling, Taihang and Subcontract Boosts Development }

Management Information Major Tradable Shareholders & Type of Shares Chairman Cai Yi Name Type (Shares) QuantityCFO Mu Yashi Shanghai PDB – GF Small-cap Fund RMB ordinary 4,700,000Co Sec. - Song Lina RMB ordinary 981,300Tel. 86-431-85883022 Ruan Dajian RMB ordinary 639,600Website www.xaec.com

Chen Yulan RMB ordinary 581,000


The company undertook about half of the overall manufacturing of the country’s three major aviation engines, namely “Qinling”, “Taihang” and “Kunlun”. Complete units and parts of military engines, foreign-trade subcontract of engines and civil products business accounted for around 62%, 25% and 13% of the company’s revenue respectively.

The company promised that 2007-2009 net profit would grow at an annual rate of 20% with payout rate not lower than 30%. Its confidence reflected some reliability for performance growth.

2008-2010 EPS is expected to be RMB 0.24, 0.29 and 0.32 respectively. We set a target price of RMB 6.24 based on 2008 26x prospective PE as the average PE of comparable A-shares peers is 26.6x. We initiate no rating for the time being as new assets will be brought in after share trading is resumed and the share price before trading resumption is meaningless.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 2,219.71 2,686.35 3,402.21 3,912.72 4,257.76 4,412.29Net profit (RMB mil.) 67.29 77.32 93.21 116.34 139.13 155.58Net profit growth rate (%) - 14.90 20.56 24.82% 19.59% 11.82%EPS (RMB) 0.15 0.17 0.19 0.24 0.29 0.32P/E (x) 41.6 36.7 32.8 26.0 21.5 19.5

Code: 600893.SH Rating: No Rating



Sector: Power Analyst: Wang Fan (王凡)

云南文山电力股份有限公司

YUNNAN WENSHAN ELECTRIC POWER CO., LTD. { Await Signs of Recovery of Heavy Industry }

Visit Summary (Date: 20 Feb. 2009)

The company sold a considerable part of electricity bought from the local at a low cost to the provincial grid in 2008. Once the heavy industry recovers, sales of high-priced industrial electricity will increase, thus the company will be significantly benefited.

Electricity price adjustment policies are positive to the company, but whether this positive factor could be fully materialized is still dependent on changes in the structure of electricity sold by the company, and ultimately on recovery of the local heavy industry.

In our view, the company should enjoy certain premium compared not only with overall domestic market but also with domestic counterparts due to its high stability. Its current share price represents around 20.3x PE 2009, still slightly lower than the industry average and the market average. Investors are advised to pay close attention to the opportunities from signs of recovery of the heavy industry.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 468.02 578.19 871.69 1053.19 1138.13 1358.30Net profit (RMB mil.) 77.13 76.57 126.13 137.84 166.13 225.85Net profit growth rate (%) 96.10 -0.73 64.73 9.3 20.5 36.0EPS (RMB) 0.44 0.35 0.47 0.35 0.42 0.57P/E (x) 15.10 19.79 49.72 24.5 20.3 14.9 Dividend yield (%) 4.51 1.46 0.25 - - -

Management Information Major Shareholders & Type of Shares Chairman Li Keyi Name Type %CFO Li Rong Yunnan Power Grid Corporation State-owned legal person 29.57Co Sec. Duan Dengqi Chen Chuping Domestic natural person 4.97Tel. 86-876-2123422 Yunnan Guangju Mingyuan Investmt. Domestic legal person 4.90Website www.wsdl.com.cn

ABC-Da Cheng Growth Fund Others 2.41




Sector: Machinery Analysts: Wang Hexu (王合绪) & Bao Wuke (鲍无可)

晋亿实业股份有限公司

GEM-YEAR INDUSTRIAL CO., LTD. { High-speed Railway Construction Acceleration Drives Railway Fasteners Demand }


2009-2010 will be a tender peak for high-speed railway fasteners. We expect 5,453 kilometers of high-speed fasteners would invite for bidding in 2009 and 4,835 kilometers in 2010. The company’s fastener business is expected to have a huge room in 2009-2010.

As an exclusive domestic manufacturer experienced in supplying high-speed fasteners having both MPHs of 250KM and 350KM, the comopany has been well prepared for the peak of high-speed railway construction and thus is likely to get a bigger market share.

We expect domestic sales of general fasteners in 2009 would be flat from those in 2008 based on estimating the downstream sectors including autos, electronic appliances, construction, machinery and hardware. However, the company has had enough experience in supplying auto fasteners after years of development, thus the revenue is likely to increase as the market share rises.

From the viewpoint of orders, 1Q09 would be a bottom for exports of general fasteners. Full-year exports revenue may drop 38.13% YoY. On the other hand, a sharp decline in sales of general fasteners business would have a small impact on the company’s profit as its gross profit margin was only 7.1%.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010ECore business revenue (RMB mil.) 1185.73 1242.64 1276.92 1,833.0 1,821.5 2,293.9Net profit (RMB mil.) 136.45 90.28 37.52 91.69 213.91 286.53Net profit growth rate (%) -29.63 -33.84 -58.44 147.61 133.29 33.95EPS (RMB) 0.26 0.17 0.05 0.12 0.29 0.39

Management Information Major Shareholders & Type of Shares Chairman Cai Yonglong Name Type %CFO Xue Ling Chin Champ Enterprise Co. Overseas legal person 59.20Co Sec. Tu Zhiqing Ding Jianzhong Overseas natural person 11.37Tel. 86-573-84185042 China Life Insurance Company Unknown 0.54Website www.gem-year.com

Hong Yi Machinery Industrial Co. Domestic legal person 0.45




Sector: Transportation

Analyst: Zheng Wu (郑武)

DAQIN RAILWAY.CO., LTD. 大秦铁路股份有限公司

{ Long-term Investment Value Depends on Transport Price Regulation Policy Change }

Management Information Major Shareholders & Type of Shares Chairman Wu Xun Name Type (Shares) %CFO Li Lin Taiyuan Railway Bureau State-owned legal person 72.94Co Sec. Huang Songqing China Huaneng Group State-owned legal person 1.29Tel. 86-352-7121248 Datang International Power Others 1.29Website www.daqintielu.com

China National Coal Group Corp. State-owned legal person 1.15

Visit Summary (Date: 12 Oct. 2008)

In the supply chain of coal, Daqin Railway enjoys the most stable transport volume and price. In China, specific transport prices for coal are higher than those in U.S., while prices for freight and passenger transport are overly low. Mismatch in price regulation has sparked demand for transfer payment. Reforms to railway prices and market access in the future will determine Daqin’s long-term transport prices and investment value.

We calculate Daqin Line’s utmost capacity would be around 500 million tons per year. If Shaoshan IV is used, it could be achieved without any new locomotive; if Hexie is used, capital spending of around RMB 5 billion would be needed. We estimate capacity of above 400 million tons would not be tried until after 2010.

The likely assets acquisition is expected to lift earnings by 10-15%. The time of injection is not only dependent on profitability of the assets but also dependent on the situation of capital markets. We forecast 08 and 09 EPS to be RMB 0.58 and RMB 0.67 respectively. Its shares are defensive when macro-economy is volatile.

Ended (Dec. 31) 2005A 2006A 2007A 2008E 2009E 2010EOperating income (RMB mil.) 13105 16571 20860 24027 27645 27834Net profit (RMB mil.) 3561 4415 6109 7495 8711 8695Net profit growth rate (%) - 24% 38% 23% 16% 0%EPS (RMB) 0.27 0.34 0.47 0.58 0.67 0.67




Sector: Financials

Analyst: Shao Ziqin (邵子钦)

CHINA PACIFIC INSURANCE (GROUP) CO., LTD. 中国太平洋保险（集团）股份有限公司

{ Miracle Created by Investment }

Management Information Major Shareholders & Type of Shares Chairman Gao Guofu Name Type (Shares) %CFO Wu Dachuan Huabao Investment Co., Ltd. State-owned legal person 17.40Co Sec. Chen Wei Shenergy Group State-owned legal person 16.60Tel. 86-21-58776688 Parallel Investors Holdings Limited Overseas legal person 13.66Website www.cpic.com.cn

Shanghai State-owned Assets State-owned 5.75

Visit Summary Date: 25 Aug. 2008

The company recorded an investment return ratio of 5.2% (non-annualized) in 1H08, far higher than that of Ping An Insurance, largely because of equity’s partially realizing return, a low proportion of transaction assets, and closed-end funds’ smoothening return.

In the first half of 2008, life insurance’s net profit growth was 95%, while property insurance’s net profit growth was -81.7%. Life insurance recaptured the core position in the company’s net profit by occupying 82.2%.

Pricing life insurance business at RMB 18.0 per share based on the company’s benchmark assumptions and 28x new business multiplier and non-life insurance business at RMB 5.8 per share based on PB valuation, we derived an overall appraised value of RMB 23.8, implying a 34.5% upside from the current level.

Ended (Dec. 31) 2006 2007 2008E 2009E 2010ERealized premium (RMB million) 47964 65536 87918 96843 113536Investment return (RMB million) 9105 27009 25126 19258 24035Net profit growth rate (%) - 583.8 18.7 9.9 14.3EPS (RMB) 0.23 0.90 1.06 1.17 1.34PE (x) 75.4 19.7 16.6 15.1 13.2


For QFII details: William Kwok | Head of China QFII Team | (852) 37629298 | [email protected] Ping An Financial Platform: Banking | Insurance | Investment Ping An Securities Company Ltd:

Hong Kong: 11/F Chater House, Central. | Shenzhen: 8/F Greater China Int'l Exchange Sq, HQ.

Shanghai: JingAn Plaza, JingAn District. | Beijing: Ping An Bldg, Financial District.

www.pingan.com/QFII

http://www.pingan.com/QFII

Documents

China A shares: Co Visit Guidebook - Ping An Insurance WEICHAI POWER CO., LTD. { “Great Weichai” has a Great Development } Visit Summary (Date: 28 Dec. 2008) ¾ The construction