GUANGZHOU (Fund China) – It can be said that the beginning of 2008 is quite propitious, but who laugh last,laugh best, I think the investors need to do a lot of homework for investment. In this year’s investment layout, let’s listen to a fund management’s research director’s recommendations:

The research director of China Universal Asset Management, HanLianwang: In the 2008 investment, we think it is necessary to analyse the fundamentals. First, pay attention to the sales corporation’s yield growth, the 2007 yield growth is higher than the overall investment expection, in 2008, we think it is hard to maintain such a situation. But In some borads,driving by the overall macro enconomic profit growth, they still have largely investment opportunities and the investment yield may be still higher than expected. Such a yield is not only a direct stock price support via the PE(price/earnings) valuation but also a good support for the valuation level. But oppositely, we have to pay attention to some boards that can not meet the expection. We have to pay closely attention to these boards because there is an absolute decline in its price, meanwhile its valuation will decline and lead a further pressure to the price. So the profit comes first , we still believe that the profit is the main facotor supporting the stock long term investment.

The second factor is a big change, we think in 2008 the overall external environment will change, mainly as there are many new factors between the macro veiw and the fundamentals. We still think the RMB exchange rate will continue to increase, especially in the first quarter, and the increased margin will be relatively large, and at the same time, we think the CPI will keep in a high level in the first half year. The core CPI will gradually straighten out as the factor price reform going on. And this will make a good contribution to the second half year’s Core CPI growth. In such an environment, we will choose the upsteam and downsteam industries which are more profitable. As the Middle stream industries’ profit are squeezed and their costs can not be transferred, and there is not a board established by fixed price. So these industries will use any opportunities and enhance the market share to maintain gross profit gains as well as produce some high effect industries and stocks. So investors should take care of a majority companies.

Copyright Fund China 2009.

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