Dafu issued a report reiterating its 00682-HK buy rating and giving it the latest target price of HK $10, equivalent to 7.9 times forecast 2010 earnings or 0.5 times two-year earnings growth, a substantial premium of 116 per cent to the market price.

Dafu refers to the fact that after Chaoda successfully raised 1.74 billion yuan last month and the liquidity situation continued to improve, it turned to be optimistic about the stock. During the recession, the oversized business model is more resilient, and the revitalization measures taken by the Government should also provide the company with additional growth momentum. Tai Fook went on to keep its profit forecasts for 2009 and 2010 unchanged at 2.7 billion yuan and 3.4 billion yuan, meaning a compound annual growth rate of 17% from 2008 to 10.

Chaoda modern agriculture rose 1.09 per cent to HK $4.65 yesterday.