Guotai Junan maintained the Asia Cement (00743-HK) buying rating and target price of 6 yuan, which is equivalent to 14.9 times the 2011 PE forecast and 1.2 times the 2011 PB forecast. Guotai Junan said it maintained the FY10 EPS forecast to RMB 0.282, while raising Asia Cement's FY11-12 earnings assumptions of 7% and 4% to RMB 0.342 and RMB 0.380 per share. Guotai Junan also said that the risk of high housing prices has begun to be released this week; Asia Cement's current valuation is more at a discount from fundamentals. The bank believes that the current valuation already reflects most of the current risks, and future valuations will reflect the good performance of 1Q11. Asia Cement fell 0.9% throughout the day to close at HK$4.4.