Net profit attributable to the parent company increased sharply by 452.1% year on year in 2008. The company mainly engages in hydropower business, and is an enterprise with integrated plant networks and integrated power generation and supply. In the first half of 2009, the company achieved operating income of 169 million yuan, a slight decrease of 8.2%, and completed net profit attributable to the parent company of 121 million yuan, a sharp increase of 452.1% over the previous year, corresponding to earnings of 0.33 yuan per share. The cancellation of part of the guaranteed debt is the main reason for the sharp increase in the company's profit. The main reason for the slight decline in the company's operating income and the sharp increase in profit is that in 2005, the company anticipated a total of 408.5 million yuan of guaranteed losses on guaranteed debts, all of which were included in 2005 non-operating expenses. However, in 2009, due to settlements reached with Chongqing Taiji Group and Zhejiang Jinxin Trust on guaranteed debts of 200 million yuan and 120 million yuan respectively, the original guaranteed losses were recovered, resulting in 2009 non-recurring income of 106.6 million yuan. The company currently has a remaining guaranteed debt of 332.4 million yuan. In the future, with the settlement of these guaranteed debts, the financing function will be restored, paving the way for development. It is expected that the company's electricity business will continue to grow in 2009. Although in the first half of 2009, the company's electricity generation and sales volume declined to a certain extent due to the financial crisis. In the first half of the year, it completed power generation of 209.81 million kilowatt-hours, a year-on-year decrease of 18.05%; achieved electricity sales volume of 39.131 million kilowatt-hours, a decrease of 12.70% over the previous year. The decline in electricity generation and sales volume caused the company's revenue to drop slightly by 8.2%, but it is believed that with the successful commissioning of the new Yongning River Level 4 power plant in the second half of 2009, as well as the recovery of high-energy industries such as ferroalloy, copper, and zinc in Liliangshan Prefecture, the power generation capacity of the company continued to increase slightly last year. The entry of Sichuan Electric Power into the company will create a stable business environment. Since the company went public in 2002, the actual controller has changed twice, but this has brought different development results to the company. In November 2002, Zhaohua Group became the largest shareholder of the company by purchasing shares through an agreement, and obtained controlling interest in the company from the Liangshan State Assets Administration Commission. However, this change in the actual controller did not bring an opportunity for the company's development, but dragged the company into the vortex of the Sichuan chain guarantee. By mid-2006, when the actual control of the company returned to the Liangshan State Assets Administration Commission, the company's contingent debt reached 947 million yuan, 1.5 times the company's net assets. In December 2006, Sichuan Electric Power Company won 37.13 million shares of the company owned by Chaohua Group with 90.2 million yuan, and on December 23, 2008 and March 16, 2009, respectively, it became the company's largest shareholder after purchasing 18.14 million shares through the bulk trading system. As a wholly-owned subsidiary of the State Grid, Sichuan Electric Power Company, as a wholly owned subsidiary of the State Grid, is strong. After entering the company, the company's guaranteed debt began to improve substantially. Therefore, it can be believed that the Sichuan Electric Power Company has become the actual controller of the company and will create a stable business environment for the company's future development. Resource advantages are a guarantee for the company's future development. As a hydropower company, there is no doubt that the availability of hydropower resources directly determines future development prospects. Although the company currently has a small installed capacity, with equity and control capacity of only 11.9 and 99,000 kilowatts, respectively, the reserves of hydropower projects are relatively abundant. Not only does it include the construction of a grade 4 120,000 kilowatt power plant in the Yongning River, but it has also participated in the development of hydropower projects totaling 400,000 kilowatts in the Muli River. According to incomplete statistics, the hydropower projects currently being developed by the company are nearly three times the number of equity installations owned by the company. At the same time, the company, as the only listed company in Liangshan Prefecture, can be expected to obtain more hydropower development rights in the future. There is a risk that the company's incoming water situation in the future is highly uncertain, and at the same time, it is difficult to judge the recovery of electricity demand within the power supply range. The comprehensive evaluation and rating adjustments take into account the one-time profit obtained by the company in 2009. We raised the company's EPS in 2009 to 0.45 yuan, and still maintain the 2010 EPS profit forecast of 0.35 yuan. Considering that the company's future development is very rapid and clear, we continue to maintain a “prudent recommendation” investment rating.