After the major shareholder Lianhua Group repaid its debts with capital and shares, the other receivables of 1.08 billion yuan owed by Lianhua Group to the company have been settled. But at present, another major dilemma faced by the company is the huge amount of borrowing and the resulting interest expenses of about 50 million yuan a year. By the end of 2006, the company had borrowed 864 million yuan in short-term loans (including 735 million yuan in overdue loans), down 265 million yuan from the end of 2005; 104 million yuan in long-term loans, down 155 million yuan from the end of 2005; and 294 million yuan in long-term liabilities due within one year, an increase of 121 million yuan over the end of 2005. Although short-term borrowing has declined, the company's bank liabilities are still as high as 1 billion yuan on the whole, and the resulting financial expenses of about 50 million yuan a year "gobble up" the operating profits of the leading products to a large extent. At present, the company is discussing with the relevant banks about the packaging of debt, and strive to get a certain degree of exemption or discount from the bank in terms of interest or principal.

Therefore, the way and progress of debt restructuring will become a major "catalyst" that affects the company's future development and stock price trend, and debt restructuring will lead to a gradual decline in the company's annual financial expenses, which decreased by about 2.9 million yuan in 2006 compared with the same period last year. In addition, the improvement of management also makes the company's management expenses have some room to dig. In 2006, the company's management expenses decreased by about 10.55 million yuan compared with the same period last year, a decrease of 16.8%. Therefore, the improvement of management and the decline of financial expenses will be another growth point of the company's future profits, which we will pay close attention to.

In addition, the company's unique competition and scale advantages in the foreign monosodium glutamate industry and the ownership structure of major shareholders may make the company the target of foreign mergers and acquisitions.

It is estimated that the EPS will be about 0.04-0.05yuan in 2007 and more than 0.1yuan in 2008. In terms of valuation, the current stock price is not attractive, but we will pay close attention to the company's debt restructuring and cooperation with foreign investors, and will not rate the investment for the time being!