Preliminary results slightly beat, hold reiterated
Maanshan announced the profit alert on 13 June after market close. Thecompany recorded a bottom line of c.RMB450mn in 1H16, which implies aNPAT of c.RMB850mn in 2Q16, slightly beating the DBe. The companyexplained the reasons of turning bottom line to positive as 1) restructure ofproduct sales, 2) decrease in raw material purchasing cost and 3) improvementof producing operation. Considering that Maanshan’s stock price is trading atHK$1.84, implying PBx of 0.7x and 8% upside potential to DB’s TP of HK$2.04,Hold reiterated.