Bank International upgraded the investment rating of Sinochem Fertilizer (00297-HK) from neutral to long-term purchase; it continued to maintain the target price of HK$2.85 set earlier by the Bank, corresponding to 13 times the 2012 dynamic PE. The current stock price has underestimated the reasonable value of the company. According to the Bank of China, in the first half of 2011, it achieved revenue of RMB 18,471.79 million, a year-on-year increase of 39.4%, core net profit of RMB 496.39 million, an increase of 46.0% over the previous year, and earnings of RMB 0.071 per share. Thanks to the recovery of the global economy and the increase in demand for chemical fertilizer products in China, the company achieved product sales volume of 8.39 million tons, an increase of 12.8% over the previous year. The weighted average product price was 2,202 yuan/ton, an increase of 23.6% over the previous year. During the reporting period, the company's consolidated gross margin increased from 4.9% in the same period last year to 6.3%, an increase of 1.4 percentage points over the previous year. However, although the company has made efforts in a backward integration strategy, it has not changed its attributes as a trading company. Sinochem Fertiliser rose 0.9% to close at HK$2.24 on Friday.