In mid-2006, Red Star Development achieved main business revenue of 456 million yuan, main business profit of 161.13 million yuan, and net profit of 40.3 million yuan, down 9.6%, 16.5% and 36.8% respectively from the same period last year. The company's fully diluted earnings per share for the first half of the year were $0.14, and the return on net assets was 4.1%. The main reason for the overall decline in revenue and profit of Red Star Development is that the growth of the CRT display industry has been replaced by flat panel display devices faster than expected, and demand and price affordability in the downstream industry have declined sharply. At the same time, the rise in strontium ore procurement costs and the decline in strontium salt production and sales may also have affected the growth of the inorganic salt business to a large extent. In an unfavorable situation where the strontium barium salt business clearly declined, the manganese salt business was the biggest highlight of Red Star's development in 2006. Guizhou Hongxing Development Dalong Manganese Industry Co., Ltd., which is mainly engaged in the manganese salt business, achieved a net profit of 26.77 million yuan in the medium term in 2006, and contributed 23.83 million yuan in net profit to the company, accounting for 59.53% of the total net profit for the current period. This time, Red Star Development's earnings per share forecast for 2006 was lowered to 0.27 yuan. Based on the latest closing price of 5.24 yuan, Red Star Development's dynamic price-earnings ratio in 2006 was close to 20 times, maintaining a “neutral” rating. However, the company is always looking for suitable replacement products or industries, and may launch large-scale investment plans in the future, thereby reversing expectations of declining profits. After the coal mining project reaches production, the annual net profit contribution to Red Star Development may reach 50 million yuan. We should pay close attention to the progress of the project in the future.