Daiwa maintained its 0682.HK buy rating; Daiwa pointed out that the company's main business profit in the first half of the fiscal year rose 17.5% from the previous year to 1.32 billion yuan, only 0.8% higher than its forecast, while net profit rose 120% to 1.9 billion yuan, 7% higher than its forecast, mainly because of the increase in the fair value of convertible bonds. However, Daiwa cut its forecast of earnings per share by 4.6% in FY09-11, mainly due to a decline in the average selling price of products and a decline in gross profit margin in the first half of the fiscal year. In addition, Daiwa lowered its target price from HK $7.1 to HK $6.75, a 40 per cent discount to the value of discounted cash flow and a price-to-earnings ratio of 5 times expected earnings per share for FY09.

The stock closed up 3.9 per cent at HK $4.50 on Tuesday.