In the first half of 2007, Hongxing Development achieved sales income of 485.24 million yuan, an increase of 6.5 percent over the previous year, a profit of 164.78 million yuan from the main business, an increase of 2 percent over the same period last year, and a net profit of 26.15 million yuan, down 37 percent from the same period last year.

According to quarterly data, Hongxing Development achieved sales revenue of 248.29 million yuan in the second quarter of 2007, an increase of 4.8% over the first quarter and 4.2% over the second quarter of 2006. The main business profit in the second quarter was 77.69 million yuan, down 2% from the first quarter, and 11% lower than the same period in the second quarter of 2006. the net profit in the second quarter of 2007 was only 4.54 million yuan, down 79% from the previous quarter and 77% from the same period last year.

When the business of barium carbonate and strontium manganese carbonate declined in the past two years, the sudden rise of electrolytic manganese dioxide products once became the main profit growth pillar of the company. However, with the increasingly fierce competition in the domestic electrolytic manganese dioxide market and the sharp rise in the raw ore price of manganese dioxide, the gross profit margin of electrolytic manganese dioxide is difficult to continue to increase. Other new products such as insoluble sulfur, thiourea, barium strontium and other small varieties developed by Hongxing in recent years have not yet formed a scale, and the coal mining business of Guizhou Rongguang Mining has not yet yielded benefits.

Hongxing's current inorganic salt and manganese dioxide business are basic chemical products with relatively low added value and high consumption of resources and energy. under the guidance of the current national policy of saving energy and reducing consumption and restraining the export of resource products, it is facing the great pressure of product structure adjustment. It is expected that the company will still be in a period of product structure adjustment for a period of time in the future, and the timing to reproduce the growth trend remains to be seen.

It is predicted that Hongxing Development will earn 0.18 yuan per share in 2007. Calculated with the latest closing price of 10.30 yuan, the company's dynamic price-to-earnings ratio reached 57 times in 2007, maintaining a "neutral" rating.