The results for the first quarter of 2010 fell short of expectations: Jinzhou Port's revenue for the first quarter of 2010 reached RMB 232 million, up 61.8% year on year; net profit increased 227% year on year to reach 73 million yuan, corresponding to earnings per share of 0.047 yuan, which is equivalent to 30.2% of our full-year forecast, which is better than expected. We believe that the higher than expected growth in the oil business and the sharp year-on-year decline in financial expenses were the main reasons why earnings in the first quarter were better than expected. Positive: The throughput of coal and oil products increased by more than 40% and 200%, respectively, in the first quarter, which was significantly better than the national average; the presence of operating leverage and financial leverage raised gross margin and net interest rate by 1.2 and 9.4 percentage points from 2009 levels, respectively, to 54.0% and 31.5%; financial expenses fell sharply by 72.5% year on year, good as expected. Negative: · Net cash flow from operating activities showed a 1.3% year-on-year decline, and the ability to obtain operating cash is still insufficient. Development trend: Due to the low base for the same period last year, the coal throughput rate of Jinzhou Port reached 40% year-on-year; looking at the whole year, it is likely that our throughput will increase by about 10%; in the first quarter, Jinzhou Port's oil business throughput growth was significantly better than we expected. Looking at the whole year, the increase in refining capacity in the hinterland and the recovery in domestic demand are expected to drive Jinzhou Port's oil business throughput to about 11 million tons. We raised the throughput growth rate of the Jinzhou Port oil business from 20% to 40% in 2010; strong growth in main business reduced the company's demand for loans, and the company's annual financial expenses are expected to drop 40% to about 40 million yuan compared to 2009; overall, strong throughput growth and falling financial expenses will drive the company's profit increase of 53.3% year-on-year to 250 million yuan in 2010. Profit forecast adjustment: We increased Jinzhou Port's earnings per share by 18.3% and 16.8% to 0.16 yuan and 0.15 yuan in 2010 and 2011, respectively, based on better-than-expected oil business throughput and lower-than-expected financial expenses. Valuation and suggestions: The company's current valuation level corresponds to price-earnings ratios of 35.5x and 37.7x in 2010 and 2011, with a premium of 37.9% and 65.5% over the industry average. The valuation safety margin is low, and the “neutral” investment rating remains unchanged.