DBS published a research report, reaffirming Dachang's “buy” investment rating and raising its target price from 6.12 yuan to 6.37 yuan. This is a 50% discount compared to its net asset value per share in 2011, a potential increase of 16%.

According to DBS, Dachang's net profit for half a year was better than expected, indicating that if the provision loss factor of 66 million yuan of investment assets is excluded, its core profit could increase 1.11 times from year to year to 389 million yuan.

According to DBS, Dachang's cost and profitability have continued to improve, and that valuations are attractive, and the current price is a significant discount of 55% compared to the net asset value per share. The bank expects Dachang's earnings forecasts per share for 2011 and 2012 to be $0.72 and $0.73 respectively, which is equivalent to predicting a price-earnings ratio of 7.6 times for 2011 and 2012, and estimates that its earnings forecasts per share for 2011 and 2012 are $12.1 and $12.7 respectively.

Dachang rose 0.92% yesterday to close at HK$5.49.