According to the quarterly report for the third quarter of 2009, from January to September 2009, the company achieved operating income of 3.303 billion yuan, an increase of 21.21% over the same period last year. The net profit attributed to the owner of the parent company was-185 million yuan, down 417.40% from the same period last year. In the third quarter, the company achieved operating income of 1.102 billion yuan, up 29.78% from the same period last year, down 49.95% from the previous year. The net profit attributed to the owner of the parent company was 19.73 million yuan, compared with a loss of 16.79 million yuan in the same period last year, and EPS was 0.02 yuan.

The company's comprehensive gross profit margin rose 6.01 percentage points in the third quarter compared with the same period last year. The company's consolidated gross profit margin was 14.00% in the third quarter, up 6.01 percentage points from the same period last year and 3.45 percentage points higher than in the second quarter. The company's period expense rate was 11.24% in the third quarter, up 1.97% from the same period last year and 2.35% higher than the second quarter. The main reason for the increase in the expense rate during the same period was that the management expense rate increased by 2.66% compared with the same period last year.

The sales volume of light goods and micro goods increased steadily, and the company's performance rebounded. From January to September, the company's light goods and chassis, micro goods and chassis sales were 36700 and 34000, up 11.37% and 41.89% from July to September, while the company's light goods and chassis, micro goods and chassis sales were 13600 and 12100, up 4.08% and 38.32% year on year. The company's third-quarter performance growth is mainly due to the increase in sales of light goods and micro goods. With the adjustment of the company's product strategy in favor of light goods and micro goods, the company's income in these two areas will increase, and the company's performance will grow steadily.

Light passenger sales fell in the third quarter. From January to September, the company's light passenger sales were 48500, up 1.2% from the same period last year. July-September, light passenger sales were 15400, down 14.97% from the same period last year and 8.12% from the previous month, which also led to a certain decline in the company's operating income in the third quarter compared with the previous quarter. We believe that with the recovery of tourist passenger transport in the fourth quarter, the demand for large and medium-sized buses will increase accordingly, while the demand for light passengers will decline.

The return on investment may improve next year. The company's investment income mainly comes from the brilliance Golden Cup, a shareholding company. From January to September, the company achieved an investment income of-179 million yuan, mainly due to a loss of 483 million yuan in the first half of the brilliance Gold Cup. From July to September, the company achieved an investment income of 11.04 million yuan, becoming a regular employee compared with the previous month. From January to September, brilliance Gold Cup sales of 94600 vehicles, an increase of 31.77% over the same period last year, an increase of 9.86% over the January-June increase. Brilliance Gold Cup is expected to grow by 30% for the whole year, and sales will be basically the same as in 2007. Taking into account the drag of losses in the first half of the year, brilliance Golden Cup is expected to contribute to the company's investment income of-140 million yuan this year. With the resumption of sales growth next year, brilliance Golden Cup will contribute about 60 million yuan to the company's investment income, including the contribution of spare parts shareholding companies. the total investment income of the company will reach 100 million yuan, and the company's net profit margin will also be improved.

Profit forecast, investment advice and risk: the company's EPS in 2009, 2010 and 2011 is expected to be-0.03,0.09 and 0.11 yuan, respectively. Based on the closing price of 4.34 yuan on October 28, the dynamic Pmax E in 2010 is not applicable for the time being, 18.95 times in 2009, and 50 times and 39 times in 2009 and 2011.

Taking into account the company's high valuation and debt ratio and the possibility of losses this year, we maintain the company's "neutral" rating for the time being. Concern: the risk of rising raw material prices, the risk that brilliance Gold Cup fails to restore sales as scheduled, the risk of macro policy adjustment and the systemic risk of the market.