The net profit of China Rongsheng heavy Industry (1101.HK) rose 0.1 per cent year-on-year to 1.721 billion yuan in fiscal 2011, only in line with the lower limit of market expectations. JPMorgan Chase refers to the decline in revenue and gross profit margin of Rongsheng's shipbuilding business and weaker sales of excavators in the second half of the year, all of which made its 11-year profit lower than expected; lowered its 12-year profit forecast to 40%. The target price is 2.3 Hong Kong dollars (equivalent to the price-to-earnings ratio of HK $2.30 in 12gambit 13); it refers to challenges such as the continued poor macro environment in the future, resulting in a reduction in shipbuilding orders; and a neutral rating.