Pig farming business: the depressed domestic pig market is a drag on the company's main business. From the perspective of the current supply and demand of live pigs in China, the supply of live pigs in China is still in surplus. Therefore, the domestic pig breeding industry as a whole is not optimistic in 2009. Luo Niushan, which is mainly engaged in pig farming business, is also facing the operating pressure brought by the recession in the industry. therefore, we believe that the company's pig farming business is difficult to improve in 2009.
Education business: steady progress, with consolidation as the tone in the future. With regard to the future development of the education business, we believe that as the existing student size of the school has reached saturation, the increase in the number of enrollment in the future will certainly lead to the expansion of the school scale, which is restricted by the small area of the school. So in order to achieve the expansion of the enrollment scale, the school must be involved. In the research, we know that the company's main tone for the future development of education business is to consolidate, mainly through strengthening management to achieve extended growth. Therefore, we believe that the company's education business is relatively stable in the next two years, and there is little possibility of rapid growth.
The real estate industry: ready to start, the future space is unlimited. The company established its subsidiary Hainan Jindi Real Estate Co., Ltd. in 2009, through which it operates the company's real estate business. At present, the project is in operation as "Jindi Hancheng". The project is divided into four phases, covering an area of about 180mu, with a total construction area of 500000 square meters. According to the current average price of 4000 yuan per square meter in Haikou, the whole project can get 2 billion of the sales revenue. If we take into account the rising housing prices in Haikou in the future, we believe that the income of the real estate project will be greatly increased. At present, the project is developed for the first phase of 30 mu of land, which is expected to be pre-sold in the fourth quarter of this year. As a result, real estate projects are difficult to provide performance in 2009 and are expected to generate revenue in 10-11.
Investment rating: from the perspective of the size and value of the company's assets, the company's PB is low, and the stock price has an obvious margin of safety. However, how to convert the company's huge assets into actual profitability is not only the main factor that determines the future development of the company, but also the focus of the market. We expect that in 2009 and 10, the EPS of Luoniushan is 0.05yuan and 0.14yuan respectively, and the valuation level is on the high side. Therefore, the company is given a "neutral" investment rating.