Changtian

Changtian: Reported rev in 3Q of Rmb125m, a fall of 27.8%yoy, and -32.0%qoq. Net profit to shareholders was Rmb9.1m, -76.0%yoy, -70.7%qoq. Increased costs of raw materials impacted gross profit margins negatively, at 12.1% for 3Q10 compared to 22.1% a quarter earlier…

The decline in rev was attributed to competition by new mkt entrants capturing mkt share and termination of orders. EPS in Rmb was 1.39c, a steep decline to 2Q’s 4.75c. Historically, avg P/E trades at 3.55x, at YTD EPS of 14.53c annualized, P/E is approx 5.8x. Note that co’s rev and profit has been declining in recent years.