Wasion (3393 HK, HK$3.88) – A grand opening

Highlights.Wasion Science and Technology Park opened officially yesterday. With this new plant, the company production capacities will nearly double in 2009.

Table 1: Capacity expansion

Year to Dec (units ‘000)	07A	08A	09F
3-phrase power metre	600	900	2,000
1-phrase power metre	2,000	3,000	5,000
Data collection terminal	80	120	500
Water metre	300	300
Gas metre		200	200

Source: Company data

Our view. The stock price has reached our target at HK$3.75. We are reviewing our model and will release update later. A major variable should be the policy movement as well as implementation process. Nevertheless, for time being, we believe the industry is still in a favorable trend, thanks to the country’s effort on environment protection and energy saving (i.e. requires more precise energy measurement, which creates demand for power metres). Meanwhile, the huge valuation gap between Wasion and Clou (002121 CH, RMB30.51), the closest peer, will probably draw investors’ attention to the former, which has even larger scale and market occupancy (3-phase: 30-35%, 1-phase: ~5%).