Profit forecast and investment rating. Forecast 2011-2013 EPS0.26 yuan, 0.26,0.34 yuan, PB is 1.35.The lowest in the metal products sector, moderate PE, market capitalization of 1.4 billion, is a small and medium-sized blue chip in small industries, multi-year dividends, with the basis of equity expansion. Comprehensive consideration, for the first time to "increase holdings" investment rating. The six-month target price is 12 yuan, corresponding to a price-to-earnings ratio of 46 times in 2012 and 35 times in 2013.

Risk hint. (1) the main risk of the industry is that the demand for welding materials is further depressed due to the adjustment of real estate. (2) the risk brought by the fluctuation of steel price, we think that this kind of risk has a certain probability in 2012. (3) the new production capacity of the company's flux-cored wire was put into production in 2013, and there is no problem with the technical process, but the market risk may still exist.