Credit Suisse maintained its 0255.HK outperformance rating, raising its target price to HK $5.30 from HK $4.30 after extending its benchmark earnings per share forecast to the next fiscal year, equivalent to a price-to-earnings ratio of 9.5 times forecast earnings for fiscal year 11.

In the bank's view, Longji is one of the most important recovery concepts among small caps, Credit Suisse said. Longji's cash flow improved, with net cash per share of HK $0.93. The stock is trading at 6.8 times forecast earnings for fiscal 11, with a dividend yield of 7%, and credit suisse believes the stock appears to be undervalued. Credit Suisse expects Longji to achieve double-digit growth in 2010, thanks to strong domestic demand for cars, household appliances and mobile phones.

The stock fell 4.5 per cent to HK $3.80 on Monday.