Incident: On February 24, the company released its 2009 annual report. During the reporting period, the company achieved revenue of 4,244 billion yuan, a year-on-year increase of -31.42%. Net profit attributable to shareholders of listed companies was 305.967 million yuan, an increase of 31.29% over the previous year, and earnings per share were 0.0966 yuan. The performance was basically in line with expectations. The 2009 plan for the company's profit distribution and capital transfer from the capital reserve fund was to give 2 bonus shares for every 10 shares. Comment: Higher gross margins and lower period expenses were the main drivers of profit growth. In 2009, the company's products were affected by a sluggish market and increased competition, and sales revenue declined sharply, but net profit showed a significant increase. The reasons include: first, gross margin increased 4.38 percentage points year on year, and second, expenses for the period fell by 12.56 million yuan year on year, and the absolute amount accounted for 41% of net profit. The Group's future capital operation is the biggest highlight. Since the company launched the targeted distribution plan in 2008, the market has had strong expectations for the overall listing of Tianjin Electromechanical Holding Group. The chairman of the group has also stated many times that Tianjin Electromechanical Holding Group will continue to integrate its high-quality enterprises into Bailey Electric. On December 30, 2009, the company launched two asset acquisition plans to acquire 58.74% of the shares of Tianjin Pump Machinery Group Co., Ltd. from the actual controller, Tianjin Baili Electromechanical Holding Group Co., Ltd., and also acquired 33.58% of the shares of Tianjin Baili Newtech Electric Technology Co., Ltd. As the listed flagship and capital platform of Tianjin Electromechanical Holding Group, the future operation of the Group's capital is still the biggest highlight. The pump industry and GIS are profit growth points. Through the acquisition of the Pump Industry Group, the industrial chain of the company's mechanical and electrical equipment manufacturing industry was further extended and the company's profit sources increased. From January to October 2009, the Pump Industry Group achieved operating income of 185 million yuan, total profit of 16.689 million yuan, and net profit of 16.1623 million yuan. Furthermore, the company plans to increase the total capital of Baili Switch by 68 million yuan with Tianjin Taikang Industrial for GIS projects. Currently, the GIS boom continues to rise, and it is expected to become a new profit growth point for the company in the future. The construction of the Binhai New Area brought development opportunities to the company. In the next 3-5 years, the total investment in the Binhai New Area will reach 1.5 trillion yuan, and will complete infrastructure investment of about 500 billion yuan. As the only listed company in the Binhai New Area economic circle engaged in the production of electrical equipment, the company has a complete electrical equipment industry chain consisting of products such as medium and high voltage switchgear, medium and low voltage electrical components, high voltage transformers, and dry-type transformers. Large-scale infrastructure construction in Tianjin will provide huge market demand for companies with regional advantages. Investment rating: We expect the company's 2010-2011 EPS to be 0.14 yuan or 0.26 yuan. In terms of performance, the current performance does not support the current valuation level, giving it a “neutral” rating.