The company's performance in the first half of 2010 was slightly better than our expectations. We think the main reasons are as follows: 1. The company's power business benefited from regional economic development. Suining, the main business area of the company, is located in the Cheng-Chongqing economic circle and is in a period of rapid urbanization and industrialization. On the one hand, in the past two years, a large number of coastal electronics, machinery and other manufacturing enterprises have moved to the western region. Suining's industrial development rate is among the highest in the province. The share of output value in the secondary sector has risen from 36.1% in 2005 to 46.1% in 2008, contributing 67.3% to economic growth. On the other hand, the urbanization process in Suining City continues to accelerate. The population of its central city will reach about 600,000 people in 2010 and form a city with a population of 1 million in 2020. The rapid development of urbanization and industrialization has led to an increase in the amount of electricity generated and sold by the company. The company's electricity sales increased 16.6% year-on-year in the current period, which shows the driving effect of industrialization and urbanization processes on the company's electricity business. We believe that during the “12th Five-Year Plan” period, the compound growth rate of the company's electricity sales could reach about 15%. 2. The impact of the drought in the first half of the year on the company's power generation business was relatively small. Affected by the drought in the first half of the year, quite a few hydropower companies in the southwest region seriously underoutput their units and their performance declined. The Fujiang River basin where the company's hydroelectric power plant is located is a tributary of the Jialing River. The first half of the year was also affected by droughts. The incoming water situation was lower than in the same period last year, but the extent was lighter than in regions such as Yunnan, Guizhou, and southwest Sichuan. Furthermore, the Huangliantuo dam, which collapsed in the fourth quarter of last year, was promptly repaired, and the flood-control repair at the Jundu Power Station was completed in May, enabling the company to work in a timely manner after entering the June flood season. As a result of the above factors, the company's self-generated power generation in the current period increased by 12.9% over the same period as incoming water decreased. Investment Proposals We believe that the driving effect of the urbanization and industrialization process in Suining City on the company's business, as well as the acquisition of Aoshenda into the field of metal ore resources, has made us cautiously optimistic about the company's future performance. Furthermore, the company has listed and sold 98.36% of its long-term loss-making pharmaceutical company shares (estimated net asset value of RMB 51.846,600). We believe that the divestment of non-performing assets will help the company enhance the profitability of its main business. We expect the company's 2010-2011 EPS to be 0.46 yuan and 0.49 yuan, respectively, maintaining the company's “increased holdings” rating.