Daily Insights20080701

1. Comments on the statement of investment by Tianwei Baobian (600550)
The company has the best PV power generation chain among domestic listed peers and is exploring a new growth driver of wind power. The company's growth will be pushed up by three pillars in the future instead of two pillars currently. We maintain earnings estimates and the "ADD" rating.
2. Benefo Tejing Electric (600468): controlling shareholder promises to put off lock-up by 3 years
The promise is bound to boost confidence in the secondary market. The company's E EPS in 2008 is about 0.4 yuan. We rate it at "ADD" given the expectation of group listing.
3. Jinjing Sci & Tech (600586): Comment on lock-up period extension & underweight price rise
We predict company performance in 08 to be 0.55 yuan and in 09 1.01 yuan. BUY is maintained, but we remind investors of short-term market risks.
4. A50 a little more bullish

Breaking news
 National Bureau of Statistics: China economy continue to slow down
 Tax cut, house loans to help quake victims
 Zhou doesn't rule out rate rise to tame prices
 Yuan on a roll again on bet central bank still favors rise

1. Comments on the statement of investment by Tianwei
Baobian (600550)
Baoding Tainwei Baobian Electric Co said in a statement today that it plans to invest 390 million
yuan to set up Tianwei Blade Co. The company will have a registered capital of 390 million yuan
with money being poured in by the listed company based on the proceedings of the project. The
listed firm will own 100 percent of the unit. Considering factors including market, technology,
equipment conditions and capital-raising capabilities, the company has decided to construct the
project in two phases. The first phase will have a yearly capacity of 400 suites of wind blades.
After the completion of the second phase, the company will reach its targeted capacity of 800
suites.
We believe that (1) Megawatt-level wind blades are the key parts in the manufacturing of
international main-stream wind power generators. The company’s involvement in the area will
help it improve its industry chain in the production of wind power equipment and plays an
important role in reducing its costs. It will help the company outshine its rivals in future
competition. (2) The first phase will have a construction period of one and a half years as well as
a trial operation period of one and a half years. The full-capacity operation period will be 12 years.
It will only have limited impacts on the listed company’s earnings in the short term. (3) The
company has the best PV power generation chain among domestic listed peers and is exploring
a new growth driver of wind power. The company’s growth will be pushed up by three pillars in
the future instead of two pillars currently. We maintain our earnings estimates and the “ADD”
rating.
07 EPS
0.85
08 EPS
1.25
Current stock price
30.82
Last rating
ADD
Current rating

2. Benefo Tejing Electric (600468): controlling
shareholder promises to put off lock-up by 3 years
Summary: The Company announces that its majority shareholder – Tianjin Hydraulic Pressure
Machinery Group – promises to put off lock-up period by 3 years since July 1
st
2008 on two
conditions. The Group promises not to sell the freed-up shares before July 1, 2011 if either of the
two conditions is not met: the after-tax EPS is more than 0.6 and share price is higher than 25
yuan (to be adjusted to X-D, or X-R price if applicable). The freed-up shares held by the Group
before June 30 and those NTS to be freed-up before June 30, 2011, total 192 mln yuan.
Our view: The promise is bound to boost confidence in the secondary market. The company’s E
EPS in 2008 is about 0.4 yuan. We rate it at “ADD” given the expectation of group listing.
Buy
Add
Hold Sell
( Initial )
Share Price（June 30）
9.21 Yuan
08/09 E EPS
0.40/0.70Yuan
Total share/A share（M）
316.80/140.97
Country/Area
China
Sector
Power Equipment
3. Jinjing Sci & Tech (600586): Comment on
lock-up period extension & underweight price rise
Summary: Zibo Zhongqi Construction Material, the big shareholder (38.6%) of Jinjing Sci &
Tech (600586), made a promise today that the lock-up period of its holding shares will be
extended to 2012 with underweight price of no less than 20 yuan/share.
Our view:
The current share price of the company is only 10.6 yuan and the promised underweight price is
twice the share price. The promise made by the big shareholder fully illustrates its confidence in
company’s development and share price. The lock-up expiry has been largely resolved.
Seen from the basic aspect, company’s investment value is also very obvious.
Effective efforts have been made in exploring the super-white glass market, company’s major
product. The sales volume in 07 was about 1.4 mln boxes and in 08 the figure is expected to rise
up to 2 mln boxes with gross profit margin of over 50%.
1 mln pure alkaline project will be put into production in June to August this year. It is estimated
that the production in 08 will be 200,000 tons and that in 09 950,000 tons, half of which will be
used by the company itself. Pure alkaline is now at the stage of windfall profit. Although we
predict possible decline in 09, we still believe there is considerable profitability.
We predict company performance in 08 to be 0.55 yuan and in 09 1.01 yuan. BUY is maintained,
but we remind investors of short-term market risks.
Buy
Add Hold Sell
( Maintain )
Share Price（12th May）
10.06Yuan
Total share/A share（M）
590.08/217.90