1. Incidents. The company today (July 26) disclosed its 2010 semi-annual report: during the reporting period, the company achieved operating income of 484 million yuan, an increase of 43.99% over the previous year; realized operating profit of 208 million yuan, an increase of 103.32% over the previous year; and realized net profit of 154 million yuan, an increase of 106.78% over the previous year. 2. Our analysis and judgment. (1) Steel has become an incremental factor driving the increase in performance. In the first half of the year, the company's handling revenue was 418 million yuan, and the handling revenue for the same period last year was only 283 million yuan. In the same period in 2008, the company's handling revenue was 350 million yuan. The company's handling revenue in the first half of 2010 was 70 million yuan more than in 2008, when the economic situation was higher, and handling revenue reached a new high in recent years. The main reason for the high increase in the company's handling revenue during the working year was that the company's handling revenue increased. First, the economy picked up, and the company's throughput of mainstream goods such as oil, grain, ore powder, and containers recovered and surpassed the level before the financial crisis; second, the company's steel supply development achieved a breakthrough, and steel throughput increased dramatically. According to relevant data, in the first four months of 2010, the company's steel transit volume was nearly 770,000 tons, an increase of 155 percent over the same period last year. At present, the company has cultivated a number of stable steel customers in hinterland such as Inner Mongolia and Shenyang, and steel products have become an incremental factor driving the increase in performance. (2) A specialized coal terminal project with a total investment of 4.2 billion dollars has been approved, and the prototype of the second largest energy export port in the North is beginning to take shape and is ready to be launched. On April 14, 2010, the National Development and Reform Commission approved the company's construction of the first phase of the Jinzhou Port coal terminal project. The project began at the bottom of the four ports and pools of Jinzhou Port and built three 70,000-ton coal loading berths (the hydraulic structures of the piers are all designed for berthing 100,000 tonnes of bulk carriers), as well as corresponding supporting facilities. The pier is 820 meters long and has a design capacity of 35 million tons per year. The project has a total investment of 4.194 billion yuan, funded by Inner Mongolia Xilingol Baiyinhua Coal and Power Co., Ltd., Jinzhou Port Co., Ltd., Datang International Power Generation Co., Ltd., and Guodian Northeast Electric Power Co., Ltd. using their own capital based on stock ratios of 53%, 33%, 10%, and 4%, respectively. The project capital is 1,468 million yuan, and Jinzhou Port will invest 484.4 million yuan as capital according to a 33% investment ratio. At present, Jinzhou Port's path to becoming a major energy port has begun to take shape. First, the Baiyinhua coalfield in eastern Inner Mongolia has now been proven to have started production; secondly, from a geographical point of view, Jinzhou Port is the most economical and convenient port of entry for coal in East Mongolia; third, the “Chi-Da-Bai” railway supporting the port has completed the Osaka-Chifeng section, and the Chifeng to Jinzhou port section is also scheduled to open to traffic in 2010. The coal specialized terminal will be the biggest highlight of the future development of Jinzhou Port, and Jinzhou Port will become the second largest energy export port in northern China after Qinhuangdao Port. 3. Investment advice. The company's EPS for 2010 to 2012 is expected to be 0.129, 0.136, and 0.15 yuan respectively (assuming revenue growth rates of 33%, 10%, and 9%, respectively), PE is 38, 36, and 33 times, respectively. The current company's stock price is 4.92 yuan, and the target PE is 18 to 20 times, giving it a “neutral” rating.