J.P. Morgan Chase tracked Pearl River Steel Pipe (1938HK) for the first time, rated it as an increase in holdings, and gave it a target price of HK$6.00.

According to the bank, in terms of steel pipe production in 2007 and 2008, Pearl River Steel Pipe is the largest steel pipe producer in China, and it will be the main beneficiary of China's pipeline construction heating up.

The bank added that Pearl River Steel Pipe is one of the four major domestic manufacturers of straight seam underground welded steel pipes. This type of steel pipe conforms to the X80 standard and is suitable for major gas pipeline network construction projects across the country. The bank pointed out that China usually plans the construction of the pipeline network at the end of the year and tenders in the first half of the year; after the expected results, Pearl River Steel Pipe will announce more new contracts.

Pearl River Steel Pipe rose 0.44% yesterday to close at HK$4.60.