DBS maintained its 01868-HK buy rating and lowered its target price to 6.90 yuan, but raised its 2011 earnings forecast by 30% in anticipation of an increase in LED product sales, while lowering the target price based on a target price-to-earnings ratio of 15 times 2011 earnings, reflecting the high risk of slowing global economic growth, expansion plans and cash flow pressure from the financial crisis.

DBS said that in order to reduce the obstacles to accelerating the use of LED lights, it will significantly reduce the price of LED lights to stimulate demand, and will adopt a proactive strategy to reduce production costs by 40% to 50%. Based on correct and competitive pricing, strong demand for LED lights will begin.

Mingli closed at HK $4.98 yesterday.