Zhejiang Longsheng: The Global Layout Is Further &Nbsp; The Trend Of Dyestuff Business Is Better.

Comment:

The global layout is further developed.

The company is mainly engaged in dyestuffs, chemical auxiliaries and textile industry. It mainly relies on dyestuff's textile dyestuffs, textile auxiliaries and leather chemicals produced in Reidsville City, and its main business covers the United States, Canada, Mexico and other countries.

The assets and liabilities of the company limited to 2010H1 were 4465 and 24 million 570 thousand US dollars respectively. The income of 2009 and 2010H1 was 9646 and 59 million 140 thousand US dollars respectively, with net profit of 472.8 and 2 million 580 thousand US dollars respectively.

The purchase of assets is conducive to the market development of KIRI Holdings Limited in North America, and will also have a positive impact on the financial position and operating results of the convertible bonds.

Since Singapore's KIRI company acquired the global business other than the United States in February 4th this year, the company will take over the global business of the company and the synergy will be further strengthened.

The trend of dyestuff business is improving.

In the context of rising raw material prices, the dye companies have increased their prices accordingly. The market price of disperse dyes is nearly 30% higher than that of August, and reactive dyes are also rising.

As the dye industry is still in high season, we expect that the dyestuff business will continue to improve (disperse polyester downstream, which will indirectly benefit from high cotton price).

Products such as two benzene, amine, resorcinol and soda ash have also benefited from the increase in the price of chemical products.

Maintaining the "recommended" rating. The dyestuff industry is expected to go back to the rising cycle. The advantages of Zhejiang's Longsheng development in new product development and industrial chain integration will be further realized. The acquisition of the company's global layout by the subsidiary company will further enhance the company's global layout. In addition, the annual production of 70 thousand tons of aromatic amine technology pformation project (and the expansion of corresponding resorcinol production capacity) will be put into operation next year. Longshan Chemical Industry (inorganic chemicals), water reducing agent and auto parts business will also keep growing. We will not consider the real estate business and the influence of the pfer of EPS, and maintain the company's 2010-2012 year forecast of 0.70, 0.89 and 1.03 yuan respectively, and maintain the "recommended" investment rating.