In the first half of 2010, the company achieved operating income of 265 million yuan, a year-on-year decrease of 1.18%; operating profit of 21.62 million yuan, an increase of 33.43%; net profit of 22.52 million yuan, an increase of 34.56%; and diluted earnings per share of 0.049 yuan. The company's 2010 earnings per share were lowered. The main reason for lowering the company's earnings per share in 2010 is: (1) The company's newly-built production was put into operation later than we expected. We anticipated that the production line would be put into operation in September 2010. The company's published data showed that the production line was expected to be put into operation in December, and the delay in production reduced the contribution of the new production line to this year's profit; (2) the company's construction business revenue fell 49.28% year-on-year in the first half of the year. The commissioning of the new production line in 2011 is expected to greatly improve the company's performance. The total production capacity of the fiberboard production line currently under construction by the company has reached 670,000 cubic meters, and is expected to be put into operation by the end of the year. After production, the company's fiberboard production capacity can reach 870,000 cubic meters. Furthermore, the newly built production line uses continuous flat pressing equipment from abroad, and can produce thin sheets of 8 mm or less. Currently, competition for thin sheets of 8 mm or less on the market is relatively moderate, and the product gross margin is high, so it is expected that the profitability of the company's products will increase after the new production line is put into operation. Based on conservative assumptions, it is estimated that the company's new production line will contribute 130 million yuan in net profit every year, or 0.29 yuan in EPS equivalent to the current share capital. Therefore, we believe that although the company's profit forecast for 2010 was lowered, it will not affect the company's investment value. The shift in the furniture industry brings investment opportunities. The furniture industry is a labor-intensive and resource-intensive industry. As labor costs rise in Guangdong and other regions, the furniture industry is shifting to the mainland. Sichuan is the most important furniture production base in the southwest region, and its abundant labor and forestry resources give it an obvious advantage in developing the furniture manufacturing industry. Sichuan Province has planned to build a furniture production capacity of 10 million pieces (sets) per year by 2015. The furniture manufacturing industry consumes 65% of fiberboard, so the development of the furniture manufacturing industry in Sichuan will drive demand for fiberboard. Profit forecast and rating: The company's EPS is estimated to be 0.13 yuan, 0.31 yuan, and 0.43 yuan respectively from 2010 to 2012. The current stock price is 6.08 yuan, corresponding PE is 47 times, 20 times, and 14 times, respectively, maintaining the company's “gain” rating. Risk warning: risk of rising timber prices; risk of fluctuating fiberboard prices.