Stabilize the position of multi-cylinder diesel engine industry, sales grow steadily. In 2010, the company sold 446000 diesel engines, an increase of 22.58% over the same period last year, and realized a main business income of 2.514 billion yuan, an increase of 24.04% over the same period last year. Sales volume remains at the fourth level in the domestic diesel engine industry. The company's annual sales performance is relatively flat, with an average monthly sales of 37199 units, mainly because the 2009 diesel engine sales benefit from the national preferential policies to stimulate the explosive growth of market demand, but also lead to the early release of market demand to a certain extent. The 80% increase in the company's profit in 2010 is mainly due to the disposal of Hefei Feilong Real Estate Co., Ltd. the transfer income and the confirmation of the growth of the performance of the associated enterprises have greatly increased the investment income by 4.6 times compared with the same period last year.

Profit margins fell slightly and profits were in line with expectations. The company's main product diesel engine gross profit margin was 9.66%, down about 0.83% from the same period last year; sales expenses and management expenses increased by 31.98% and 33.20% respectively, mainly due to a slight decrease in profit due to the increase in salary adjustment and technological research and development expenses; the increase in interest income of the company led to a sharp decrease in financial expenses by 73.23%. In addition, the overseas market rebounded in 2010, and the company's overseas market contributed 83.3194 million yuan in income, an increase of 254.18% over the same period last year. We believe that the company's earnings are in line with expectations and the overall financial structure is relatively reasonable.

Speed up the adjustment of product structure and improve the capability of equipment manufacturing. In 2010, the company successfully developed Guo4B series engines with electronically controlled high pressure common rail, EGR and POC (flow particle catcher) as the main technical route. In addition, the company has successively invested in Tianli power high-power diesel engine project, Tianhe machinery high-quality casting project, Jintian machinery cylinder block processing line integration project, Tianli power cylinder block automatic processing line project and so on, so that the company's equipment manufacturing capacity has been greatly improved. In 2011, the company continues to speed up the research and development of minicar engines, medium and heavy truck engines, cooperate with product structure adjustment, and promote the improvement of service capacity. We believe that the company's new round of technological transformation and equipment improvement will provide a good driving force for the company's sustainable development.

In view of the imminent change of the actual controller of the company, we predict that the EPS of the company from 2011 to 2013 is 0.51,0.80,0.92 yuan respectively, and the corresponding PE is 41 times, 26 times and 23 times respectively. We will continue to focus on this company.