The company released its 2010 quarterly report on April 20. It achieved operating income of about 140 million yuan, a year-on-year increase of 20.3%, net profit attributable to shareholders of listed companies of 5.09 million, an increase of about 38.0% over the previous year, and achieved basic earnings per share of 0.0161 yuan. After deducting non-recurring profit and loss, the basic earnings per share were 0.0009 yuan. The performance was lower than expected. The improvement in the capital market and the increase in investment income from subsidiaries are driving profits to grow faster than operating income. During the reporting period, the company's main business gross profit margin was 15.6%, and the period expense ratio was 17.1%. The main reason the company's net profit grew faster than the main revenue. Benefiting from the improvement in the capital market, the company increased its investment in transactional financial assets in the first quarter, thereby increasing profits by about 2.44 million; at the same time, the company's participating subsidiaries contributed 3.98 million operating profit. We believe that the benefits obtained by investing in transactional financial assets are not sustainable, and the company must develop new profit growth points in the future. Group asset injection is still the company's main focus. The company is the listed investment and financing platform for Tianjin Electromechanical Holding Group. Since the company launched a targeted increase plan in 2008, the market has strong expectations for the group company's overall listing. At the end of 2009, the company launched two asset acquisition plans to acquire 58.74% of Tianjin Pump Machinery Group's shares from the actual controller, Tianjin Bailey Electromechanical Holding Group Co., Ltd., and also acquired 33.58% of Tianjin Baili Newtech Electric Technology Co., Ltd. After the acquisition is completed, the company's industrial chain will be further extended, and the source of profit will increase. Benefiting from the construction of the Binhai New Area, the company ushered in good development opportunities. The total investment amount for the Binhai New Area will reach 150 million yuan in the next 3-5 years, and will complete infrastructure investment of about 500 billion yuan. The company is the only listed company engaged in the production of electrical equipment in the Binhai New Area economic circle. It has products such as medium and high voltage switchgear, medium and low voltage electrical components, high voltage transformers, and dry-type transformers to form a complete electrical equipment industry chain. Large-scale infrastructure construction in Tianjin will bring it good development opportunities. Profit forecast and investment rating: We expect the company's 2010-2011 EPS to be 0.14 yuan and 0.26 yuan. The current stock price has reached 18.19 yuan, which partially reflects the expectations of the Group's asset injection. We believe that the current performance is insufficient to support such a high share price and give the company a “neutral” rating.