Daiwa said that 00682-HK (Hyundai) raised 390 million yuan from the old to the new at 5 yuan per share. The bank took a positive view on the placement, believing that the move would allay market concerns about the company's debt repayment risk, while the dilution of earnings per share was controllable. Chaoda Agriculture is expected to use the proceeds (net raised HK $391 million) and cash on hand (1.28 billion yuan as of June 30, 2008) to meet the 1.4 billion yuan convertible bonds to be redeemed in May.

The bank kept its profit forecast for the 2009-11 fiscal year unchanged, but cut its earnings per share forecast by 1.3 per cent Mel 3.8 per cent. It maintained its buy rating and lowered its target price from HK $7.70 to HK $7.10, still equivalent to 5 times earnings.

Chaoda modern agriculture rose 1.63 per cent to HK $5.62 yesterday.