In 2011, the company's cumulative operating income was 1232.6028 million yuan, and in 2010 it was 889.914,900 yuan, an increase of 38.51% over the previous year; net profit attributable to the owners of the parent company in 2011 was 55,2017 million yuan, and in 2010 it was 43.6719 million yuan, an increase of 26.40% over the previous year. Investment points: In 2011, the company's main pump products business grew rapidly. The main reason for the increase in the company's performance was that pump product sales increased by 117%; after the implementation of allotments to raise capital, the scope of the company's financial statement consolidation changed. The company's pump products are a traditional business, and the improvement in the company's basic performance has enabled the company to have a high safety margin. The company's hydraulic transmission products will grow rapidly in 2012 as market demand for hydraulic torque converter products increases and the company's production capacity construction gradually reaches production. It is expected that in 2012, the company's hydraulic torque converter revenue will expand rapidly. It is estimated that sales revenue can reach 350 million yuan, an increase of 200 million yuan over the previous year from 150 million in 2011, and chemical biological equipment will also grow from 330 million to 450 million yuan. The company will focus on the construction of hydraulic torque converter projects starting in 2012. The company will carry out key projects - automobile hydraulic torque converter construction projects. It plans to build five hydraulic torque converters for passenger cars, one hydraulic torque converter for commercial vehicles, and production lines for core components and related auxiliary facilities, reaching production capacity for automobile torque converters with an output of 1.8 million units per year, and achieving sales revenue of 2 billion yuan. The total capital requirement for the project design is 1.1 billion yuan, of which 1 billion yuan is planned to be raised through equity in the capital market, and the company plans to issue an additional 80 million shares. The market prospects for hydraulic torque converters are lofty. Hydraulic torque converters are the core components of AT automatic transmissions. Currently, more than 95% of our automatic transmissions depend on imports. In 2011, China's automobile production reached about 18.5 million units, including about 13.7 million passenger cars. It is estimated that within the next 5 years, passenger car sales in China will probably reach 20 million units/year, and automatic transmission sales volume can reach 10 million units/year. The company's target market is huge and attractive. Profit forecast and investment recommendations We expect the company's EPS in 2012, 13, and 14 to reach 0.37, 0.58, and 0.68 yuan/share, based on the 2013 25 times PE valuation, with a reasonable value of 14.60 yuan. Recommended rating risk warning: The development process of AT automatic transmissions has unpredictable factors