Bank of China International published a research report that lowered Dafuishui's investment rating from buying to selling, maintaining a target price of 6.3 yuan, and indicated that the downgraded rating predicted a price-earnings ratio of 12 times in 2010 due to high valuation at current prices, which is 10.2 times higher than the 5-year average valuation.

According to the report, as of the end of March this year, Big Happy's net profit fell 21% to 80 million yuan, and core profit fell 10% to 78 million yuan, which was lower than the bank's expectations of 15%. Due to a 1% drop in same-store growth and a slowdown in store expansion progress, revenue increased only 2%.

The bank expects that Dafuaihuo's net profit in 2010 will remain basically the same, and that relatively rapid growth will only resume in 2011-12.

Faihuai dropped 6.17% to HK$7.3 yesterday.