Guoyuan (Hong Kong) published its latest report, saying that it first paid attention to Pearl River Steel Pipe (01938-HK) and gave it a purchase rating; the target price was HK$6.55, equivalent to 11.19 times PE in 2010, a 42% premium over the market price.

According to Guoyuan (Hong Kong), Pearl River Steel Pipe has advanced technology for straight seam submerged arc welded pipes and has obvious technical advantages; furthermore, the entry barriers to the industry are high. At the same time, international and domestic oil and gas pipeline construction is growing rapidly, making its prospects promising.

Pearl River Steel Pipe closed at HK$4.58 last Friday.