Dahua Jixian maintained the Tianjin Port Development (3382.HK) selling rating at a reasonable price of HK$1.05. Dahua further stated that the valuation of Tianjin Port's development is still unattractive, although the acquisition of 56.81% of the shares in Tianjin Port (600717.SH) from the Tianjin Port Group will boost earnings growth. Dahua pointed out that the total cost of the transaction is about HK$10.961 billion and will be completed using HK$7.031 billion worth of new shares for Tianjin Port Development plus HK$3,930 billion in cash. Dahua said that after completing the issuance of new shares and asset injection, according to the market's general earnings expectations for Tianjin Port, it is estimated that the earnings per share of Tianjin Port Development in fiscal year 2009 will increase by 16.6%. Dahua lowered the net profit forecast for the 2008-2010 fiscal year of Tianjin Port by 13%, 27%, and 23%, respectively, to reflect rapidly deteriorating throughput data. Dahua said that the stock's valuation is equivalent to 18.9 times the predicted price-earnings ratio for FY2009, 16.3 times the price-earnings ratio after completion of the transaction, and 0.9 times the price-to-book value ratio for FY2009, which is higher than the average for other H shares (the predicted price-earnings ratio of 7.5 times for FY2009). The stock fell 13.33% yesterday to close at HK$1.95.