Guoyuan Hong Kong gave 00923-HK a buy investment rating for the first time, saying that the company's household paper business had a gross profit margin of more than 40 per cent, which was comparable with companies such as Hengan Internationgal Group. The industry average PE level is 17.0 times, giving the company a target price of HK $3.30, which is 22.2 per cent higher than the current price.

According to Guoyuan, the company's operating income for fiscal year 2010-2013 is expected to reach HK $2.61 billion in fiscal year 2013, CAGR is 22.5%. Net interest rate rose from 20.5% in fiscal year 2010 to 24.9% in fiscal year 2013. At present, the company has a production capacity of 91000 tons of household paper, and the company plans to carry out equipment transformation in 2011, with an investment of about 60 million yuan, which can be increased by 15000 tons. Rough calculation estimates that the company's household paper production capacity will reach 150000 tons in 2013.

Fuhe Group fell 1.85 per cent to HK $2.65 yesterday.