Shen Wan issued a report that lowered the target price of Tianjin Port Development (03382-HK) to HK $1.90 to reflect the negative impact on the company and maintained its "neutral" investment rating, believing that the company's current valuation was reasonable and that there was no catalyst for share price performance.

The report points out that the new export tax rebate policy will slightly reduce the company's profits. China's Ministry of Finance and the State Administration of Taxation announced on June 22, 2010 that the export tax rebate for some steel and non-ferrous metal processing materials will be suspended from July 15, 2010. The bulk cargo terminal developed by Tianjin Port has part of the business of steel and non-ferrous materials. The new policy will reduce exports of steel and non-ferrous materials, thereby reducing the company's profits to some extent. Shen Wan lowered the company's profit forecasts for 2010 and 2011 to reflect this impact; the company's earnings will change from negative to positive in 2010. The company recorded a loss of $48 million in 2009 due to an one-time loss caused by the merger. In the first quarter of this year, we saw the company's bulk cargo and container business recorded strong growth.

The bank said that even after taking into account the impact of the latest VAT policy, it still predicted that the company's profits would turn from negative to positive; it was optimistic about the company's long-term development; but the valuation was reasonable in the short term: by eliminating competition after the merger with A-share listed company 600717-CN. The company has enhanced its competitiveness in negotiations with shipping companies, and the bank is optimistic about the economic development of the hinterland of Tianjin Port, so it is optimistic about the company's development prospects. however, in the short term, it does not see much catalyst for upward share prices.

Today, the development of Tianjin Port was flat at HK $1.87.