Announcement of the Company's Positive Profit Alert
The company announced Positive Profit Alert on 1 February 2015, stating that the company's annual net profit attributable to shareholders of the company witnessed a YoY growth of over 50% in 2015. The primary reasons for this growth include increases in 2015 operating revenues and corporate income tax rebates from five projects in Wuhan, Huizhou, Taizhou, Pingyang and Yongjia. Such data meet market expectations and may be slightly higher eventually.
Valuation
In 2015, the company was awarded two new contracts with a total scale of 3,300 tonnes. Size of individual project was greater, so the profitability is expected to be more favourable, which will make a positive contribution to enhancing the company's performance in the next two years. The company's operating performance remains satisfactory, but economic downturn may result in a shortage of funds in local finances, and thus the company's cash flow may be affected to a certain extent. Therefore, we lower the company's target price to HK$4.35 and the "Buy" rating is maintained. (Closing price as at 4 Feb 2016)
Financials


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