Guotai Junan maintained Baihong Industrial's (02299-HK) purchase investment rating and target price of HK$6.80, which is equivalent to 13.8 times the 11-year price-earnings ratio.

According to Guotai Junan, the company announced that it has successfully increased its design production capacity of stretched wire from 305,000 tons per year as of September 1, 2011 to about 350,000 tons per year. The new production line uses the industry's most advanced fully automated machinery and equipment imported from Germany (Barmag) and Japan (TMT). The additional capacity increased the total production capacity (including FDY, POY and DTY wire) by 6% from 780,000 tons to 825,000 tons.

Baihong Industrial declined 0.45% yesterday to close at HK$4.41.