DBS has raised Zhenmingli (1868.HK) rating from holding to buying, and raised the target price from HK$2.70 to HK$2.85. Zhenmingli previously announced the introduction of the China Environment Fund as the second largest shareholder and issued 96.7 million new shares (11.3% of the expanded share capital) to it at a price of HK$2.40 per share; it stated that the capital raised proceeds of HK$232 million are intended to be used to fund ongoing capital expenditure requirements and general working capital. The main attraction of Zhenmingli is its LED chip business; DBS Weigao said that Zhenmingli management believes demand for LED chips will be very strong because the backlighting of LCD TV panels is shifting from cold cathode lamps to light-emitting diodes (LEDs). According to DBS, LCD TV panels using LED backlights will explode, and are expected to reach 90 million units by 2013 and only 400,000 in 2008, so demand for LED chips will also jump sharply. True Mingli rose 6.98% to HK$2.30 yesterday.