DBS maintains the New Environmental Energy (3989.HK) purchase rating, with a target price of HK$2.10. The company agreed to sell all of the shares in Full Charm Holdings, which is engaged in the garment manufacturing business, to Chairman Yue Xinyu at a price of HK$450 million, of which HK$200 million was settled through a cashier's note, and the remainder was settled in cash. DBS alleges that the disposal of the above operations will result in losses of HK$93.5 million (the company's market value is HK$577.63 million), mainly due to loss of fair value of the promissory notes. However, disposal of the apparel manufacturing business is the right direction because the business lost HK$286.2 million after tax in FY09, and the first half of FY10 was also severely hit by the European debt crisis, as banks tightened their credit policies. DBS stated that the above transaction had no impact on the profit forecast for FY10 (estimated net profit of HK$91 million) because the profit forecast was based only on the waste energy business and did not include one-time projects (disposal losses and loss of termination of operations). New Environmental Energy resumed trading today, plummeting 18.07% throughout the day to close at HK$0.68.