Citic Pacific Rose 4% but Citi is selling in stocks

After the opening of the morning after the recovery of Citic Pacific afternoon increase in shares, the share price of 3.69% to 16.88 Hong Kong dollars, deal 8.2949 million shares.　　Citigroup issued a report saying it had given the unit a rating, but raised its target price from HK $7 to HK $13, but still at a discount of 23% on market prices. Citi means Citic Pacific is the only stock in the group that has been traced to a sales rating. Its share price is not based on its equity premium, which is equivalent to a 28.4 times-fold price-to-earnings ratio in 2010, which is twice times the level of Fosun International (00656-HK) and Shanghai Industrial (00363-HK).　　Although there is a potential asset infusion or closer relationship with the parent company, the unit has recently been strongly motivated, however, it is believed that the company is financially unable to meet the conditions for a substantial acquisition, as a net debt/equity ratio of more than 120% per cent by the end of 2010 is financed by a new loan or a sale of non-core assets through a share placement. Citi said the 2009-10-year earnings forecast for Citic Pacific had been raised by 2%-7% per cent, despite factors such as higher sales forecasts for property assets, increased forecast for the sale of specialty steel assets, higher p/E ratios in the steel business and a narrower discount to equity. But since 2011, interest costs will begin to erode Citic Pacific's profitability.