Daiwa lowered the target price of Zhenmingli (1868.HK) from HK$1.30 to HK$1.05, with a target price-earnings ratio of 6.5 times. This is based on adjusted profit expectations for FY2009. Daiwa downgraded Zhenmingli's rating from holding to weaker than the market. The reason is that the 2008 fiscal year results to be announced in mid-April are potentially disappointing. This expectation will affect stock prices. It is expected that 2009 shipments will weaken further. It is expected that the use of high-cost materials and the decline in operating rates for fiscal year 2009 will affect the level of gross profit margin. Daiwa expects Zhenmingli's net profit for the second half of 2008 to HK$81 million, down 68.2% from the same period last year to HK$81 million, lowering profit expectations for the 2008-09 fiscal year by 24.2% and 38.7% respectively; currently, profit for the 2008-09 fiscal year is expected to decrease by 44.6% and 33.4%, respectively. True Mingli rose 2.40% to HK$1.28 on Friday.