Citi maintained its buying rating for Tianjin Port Development (3382.HK), with a target price of HK$4.40. Tianjin Port Development announced that it will raise HK$2.47 billion from allotment of shares to acquire 56.81% of Tianjin Port (600717.SH) shares. Tianjin Port Development plans to place 886.5 million new shares at HK$2.50 per share, 15% off the stock's closing price of HK$2.94 on Tuesday. However, Citigroup said that allocating shares at a 15% discount is attractive. Citi estimates that the allotment of shares will increase the book value of each share of Tianjin Port Development by about 5%. Citi said that the valuation of Tianjin Port Development's peers is equivalent to 1.7 times the expected book value in 2010. If this market account ratio is used, the reasonable value of Tianjin Port Development after allotment of shares may be between HK$3.78 and HK$3.84. However, Citi believes that the earnings per share of Tianjin Port Development in 2010 will remain sluggish because of the relatively low utilization rate of the company's newly built berths during the 2008-09 fiscal year. Tianjin Port Development dropped 2.00% yesterday to close at HK$2.94.