RBS (Royal Bank of Scotland) published a research report showing the investment rating of Victory Pipeline's “buy” for the first time, and the target price of 2.2 yuan, a potential increase of 36%. This is quite a prediction of 13.8 times the price-earnings ratio in 2010, indicating that its production capacity by 2012 could “double” compared to 2009, which could be the driving force for future growth.

According to RBS, Shengli Pipeline is the main manufacturer of oil and gas welded pipes for spiral submerged arc (SSAW) in the mainland, and is expected to benefit from increased demand for natural gas construction. It indicates that the group's quest to expand production capacity will be a catalyst for this stock. It is estimated that its compound profit growth rate from 2009 to 2012 reached 24%, and the compound revenue growth rate is 27%.

The report predicts that Victory Pipeline's earnings forecasts per share for 2010 and 2011 will be RMB 0.14 and RMB 0.19, respectively.

Victory Pipeline closed at HK$1.88 yesterday.