Shuguang Co., Ltd. released its 2011 quarterly report on April 29, achieving operating income of about 1.61 billion yuan, an increase of about 31.5% over the previous year; net profit attributable to shareholders of listed companies was about 47 million yuan, an increase of about 32.7% over the previous year; and the diluted earnings per share were about 0.16 yuan. The rapid growth of the company's traditional business provides a sufficient margin of safety. The NEV business seizes “one big, one small” (new energy bus and low-speed electric vehicle), which has the most potential. With the continuous development of the new energy business, the company is expected to become the optimal NEV target for the NEV business contributing a large percentage of revenue and profit in the future! We expect the company's 11-year and 12-year EPS to be 1.2 yuan and 1.76 yuan respectively. The current stock price is 19.3 yuan, and the corresponding PE is 16 times and 11 times, respectively. We believe that the establishment of a joint venture that is in line with the development direction of the national NEV industry and has huge market space will provide the company with more room for development and maintain recommendations! Investment risks mainly lie in the sharp decline in profit margins due to rising industry costs, lower than expected growth in traditional businesses, and lower than expected progress in promoting new energy businesses.