Incidents: On August 25, the company released its 2011 interim report, which achieved operating income of 5.636 billion yuan, a year-on-year decrease of 7.5%; net profit attributable to listed companies was 15.72 million yuan, a year-on-year decrease of 86.88%; and realized earnings per share of 0.05 yuan, a year-on-year decrease of 87.80%. The decline in the price of review products affected gross margin of non-ferrous metals of 2,390 billion yuan, a year-on-year decrease of 16.35%, and a year-on-year increase of 1.52 percentage points to 0.42%; precious metals revenue of 2,457 billion yuan, a year-on-year increase of 2.04%, and gross margin of 0.93 percentage points to 5.39%; chemical and other operating income fell 9.03% and 0.82% to 113 million yuan and 585 million yuan, respectively, while gross margin increased -17.53 and 2.75 percentage points to 46.29% and 11.30%, respectively. Among them, the gross margin of electrolytic lead in non-ferrous metals increased by 3.21 percentage points to -0.90%, but operating income fell 15.49% year on year to 2,216 billion yuan; the revenue of gold and silver in precious metals was 1.106 billion yuan and 1.351 billion yuan respectively, up 105.59% and -27.76% year on year, and gross margin increased by -4.61 and 3.22 percentage points to -0.44% and 10.16% year on year. In addition, the operating income and gross margin of sulfuric acid and crude copper all declined to varying degrees. Against the backdrop of a slowdown in the global economy and weakening Chinese demand, the sales prices of the company's main products, electrolytic lead, gold, and silver, continued to decline, leading to a sharp decline in the company's operating income and profit levels. Asset impairment losses and financial expenses affected the company's performance. The company's net profit attributable to listed companies in the first quarter was 48.74 million yuan, while the second quarter had a sharp loss of 33 million yuan, making earnings per share for the first half of 2012 only 0.05 yuan, lower than our previous expectations. The reason for the sharp losses in the second quarter was that prices in the non-ferrous and precious metals markets fluctuated greatly in the first half of the year, assuming that inventory price declines caused asset impairment losses of 176 million yuan, an increase of 659.09% over the previous year; financial expenses increased by 81.81% to 113 million yuan, mainly due to exchange losses and a year-on-year increase in the scale of financing. However, in the first quarter, asset impairment was only 019 million yuan, and financial expenses were 50 million yuan. Profit prediction and rating As the company's recycled lead projects are completed one after another, the profitability of the recycled lead business will improve, and we are optimistic about the company's ability to develop this business in the future; when product prices are low, the company has already made preparations for large inventory price drops, and price fluctuations will weaken their impact, and there is a possibility that price drops will sink back. We expect the company's 2012-2014 EPS to be 0.63, 0.83, and 1.14 yuan respectively, maintaining the company's “increased holdings” rating. Risks indicate the risk of large fluctuations in lead prices; project construction progress falls short of expectations; and the risk of environmental remediation.