Earlier this month, the State Council issued a document approving the establishment of Dalian Jinpu New Area. We believe the establishment of the new zone will have a positive impact on the company, as it may attract more investment into the region and northeast China to increase the company's throughput. At the same time, we expect further support policies for Dalian's port and shipping industry.

The increase in port throughput in Dalian is in line with expectations. In the first five months of 2014, Dalian's cumulative container throughput increased 4.1% year on year; general cargo throughput increased 3.2% year on year; and foreign trade cargo throughput increased 3.7% year on year.

Maintain the 2014-2016 earnings forecast. We maintain our 2014-2016 earnings forecast to reflect throughput data in line with expectations. Profit for 2014-2016 is expected to be RMB 784 million, RMB 849 million, and RMB 919 million.

Maintain the “collect” rating and target price of HK$2.38. We think the company's current valuation is reasonable. The establishment of the Jinpu New Area is a catalyst for stock prices. We expect further support policies and become the next catalyst. Maintain the “collect” rating and target price of HK$2.38, equivalent to 10.5 times, 9.7 times and 8.9 times the price-earnings ratio of 2014-2016 and 0.6 times the P/B of 2014.