Bank International raised the investment rating of Oriental Group (00581-HK) to buy, and raised the company's target price to 4.6 yuan. The company's earnings per share are expected to reach 0.55/0.59 yuan in 2011/2012, respectively. The P/E corresponding to 2011/2012 is 5.0x/4.7x, respectively. The company is currently ahead of ordinary steel companies in terms of profitability and is significantly undervalued. According to Bank International, the company achieved main operating income of 19.652 billion yuan and net profit of 1,155 billion yuan in the first half of 2011, an increase of 28.0% and 44.7% respectively over the previous year; it achieved earnings of 0.39 yuan per share. The company overcame the adverse effects of the sharp rise in raw material prices. The gross profit per ton of steel rose from 313 yuan/ton in the same period last year to 411 yuan/ton, driving the company's profit growth better than expected. The company's current product structure is mainly steel for construction, and the demand situation in the downstream market is clearly better than plate strip. Oriental Group rose 12.63% yesterday to close at HK$3.3.