From January to September 2010, the company achieved operating income of 430 million yuan, an increase of 37.85% over the same period last year; operating profit of 17.09 million yuan, up 53.30% over the same period last year; net profit belonging to the owner of the parent company was 26.55 million yuan, up 61.57% from the same period last year; earnings per share was 0.07 yuan; net profit attributable to the owner of the parent company was 11.85 million yuan after deducting non-recurring profit and loss, an increase of 22.77% over the same period last year.

From July to September, the company achieved operating income of 135 million yuan, up 9.53% from the same period last year; operating profit was 5.51 million yuan, down 43.53% from the same period last year; net profit belonging to the owner of the parent company was 17.06 million yuan, up 140.91% from the same period last year; earnings per share were 0.04 yuan; net profit attributable to the parent company after deducting non-recurring gains and losses decreased by 92.17% over the same period last year.

Non-recurring profit and loss increases the company's performance growth, which is not sustainable. During the reporting period, the company's revenue growth rate was 37.85% year-on-year, lower than the 61.85% year-on-year growth rate of net profit, while that in the third quarter was only 9.53% year-on-year, much lower than the 140.91% year-on-year growth rate of net profit. This is mainly due to the fact that the company's non-recurrent profit and loss income reached 14.7 million yuan, accounting for 55.37% of the company's total net profit, an increase of about 7.92 million yuan over the same period last year. Greatly increase the growth rate of the company's performance Excluding the impact of non-recurring profits and losses, the company's net profit grew by only 22.77% from January to September compared with a year earlier, while net profit from July to September fell 92.17% from a year earlier. The company's non-recurrent profit and loss profit is mainly due to the fact that the company's subsidiary Bailey Electric Co., Ltd. received government funds for scientific and technological innovation and investment income from the disposal of transactional financial assets, which is not sustainable. However, at present, the company is basically on the right track, and its profitability may be effectively improved in the future.

Affected by the adjustment of product structure, the company's comprehensive gross profit margin continues to decline. During the reporting period, the company's gross profit margin decreased by 4.04 percentage points to 17.25% compared with the same period last year, and the gross profit margin continued to decline. We judge that it is mainly due to the continuous increase in the ratio of tungsten and molybdenum products with low gross profit to the company's total income. At present, the company already holds a 100% stake in Ganzhou Tejing Tungsten and Molybdenum Industry Co., Ltd., with the improvement of domestic downstream demand for non-ferrous metals, the company's income will enter a trend of continuous growth. The gross profit margin will show a downward trend.

During this period, the expense rate has dropped sharply, which is conducive to the long-term development of the company. During the reporting period, the company's expense rate during the period was 16.29%, down 6.74% from the same period last year, of which the sales expense rate decreased by 2.44% to 4.21%, the management expense rate decreased by 4.86% to 10.06%, and the financial expense rate increased slightly. We believe that the sharp decline in the company's expense rate during the period is mainly due to the substantial increase in the company's revenue and the basic stability of the absolute value of expenses during the period, as well as cost control during the company's enhancement period, if the company can maintain a sustained growth in revenue in the future, there is room for further decline in the expense rate during the company period.

Private placement promotes the upgrading of the company's industry, and the superconducting current limiter is the future profit growth point of the company. Since 2009, the company has stepped up the acquisition of assets, and through the gradual integration of assets, the profitability of the company's products has been improved to a certain extent. in July 2010, the company launched a non-public offering plan. It is proposed to raise 1 billion funds to invest in smart grid equipment with high and new technology and deep processing projects of rare metals, among which superconducting current limiter is one of our most promising projects, and the project has a broad market space. If it can be put into production smoothly in the future, it will help to promote the company's industrial upgrading and enhance the company's core competitiveness.

Profit forecast and investment rating. Earnings per share in 2010 and 2011 are expected to be 0.12 yuan and 0.15 yuan respectively, and the corresponding dynamic P / E ratio is relatively high, which does not have reference value, so we temporarily give the company a "neutral" rating; however, we are optimistic about the company's asset integration and the development prospect of the proposed fund-raising project. we will adjust the company's profit forecast and investment rating accordingly according to the company's asset integration process and the construction progress of the fund-raising project.