From January to September 2009, the company achieved operating income of 1.823 billion yuan, an increase of 24.4% over the same period last year, operating profit of 13.32 million yuan, an increase of 28.8% over the same period last year, and net profit of 10.49 million yuan belonging to the owner of the parent company, an increase of 59.1% over the same period last year. From July to September, the company achieved operating income of 681 million yuan, an increase of 368% over the same period last year, operating profit of 40,000 yuan, down 96.6% from the same period last year, and net profit belonging to the owner of the parent company was 1.94 million yuan, an increase of 162.7% over the same period last year, and earnings per share reached 0.001 yuan.

The company's operating income increased significantly in the first three quarters. The company mainly deals with monosodium glutamate and compound fertilizer, of which monosodium glutamate business accounts for about 77% of the company's income. During the reporting period, the company's operating income increased significantly, mainly due to the steady growth of monosodium glutamate demand, monosodium glutamate business revenue increased rapidly, monosodium glutamate business revenue increased by 19.87% in the first half of the year. In terms of profitability, the company's gross profit margin was 12.2%, down 3.3 percentage points from the same period last year, mainly due to: 1) the price of upstream raw materials rose sharply, resulting in a sharp decline in monosodium glutamate gross profit margin. The company's monosodium glutamate gross profit margin fell 3.09 percentage points in the first half of the year. 2) due to overcapacity, the company's compound fertilizer prices declined year on year, resulting in a sharp decline in the gross profit margin of the compound fertilizer business, which fell 18.47 percentage points in the first half of the year. We believe that as the price of raw materials such as flavor nucleotides in the upper reaches of monosodium glutamate has been maintained at a high level, it is difficult for the company's gross profit margin to improve in the near future.

The decline in expense rate led to an increase in the company's profits. During the reporting period, the company expense rate fell 3.2 percentage points to 12.2%, which depends on the sharp decline in the company's administrative and financial expenses, which shows that the company's internal management has improved.

The leader of monosodium glutamate industry. The company is the leader of the domestic monosodium glutamate industry in 2008. Reclaimed the iconic brand of China's monosodium glutamate industry, re-selected as the "Top 500 Asian Brands", ranked 445, 17 places higher than the previous one, and was recognized as the national branch center of agricultural product processing technology research and development by the Ministry of Agriculture. Henan Provincial Party Committee and Provincial Government was awarded "excellent leading Enterprise of Agricultural industrialization in Henan Province".

Earnings forecasts and ratings. We maintain the company's EPS of 0.01yuan and 0.01yuan in 2009-10, according to the previous trading day valuation of 3.86yuan, corresponding to the dynamic price-to-earnings ratio of 284X and 309X, in view of the company's weak growth, the company was given a "neutral" investment rating.

Risk hints: 1) upstream flavor nucleotide price rising risk; 2) compound fertilizer price falling risk; 3) market risk.