The expected realization of land transfer in the early stage will provide a guarantee for the company to realize the benign development strategy in the future on the basis of thickening net assets. We discussed the company value of leading shares from the perspective of asset undervaluation and merger and acquisition in the early stage. It is pointed out that the revaluation value of the three measurable and realizable pieces of land that do not affect the continuous operation of the company is about 840 million, and the asset value is the basis of mergers and acquisitions. The company announced today that Huangpi South Road of the three plots of land has been transferred, earning 435 million revenue, which is higher than our previous expected value of 370 million. Although there is great flexibility in the net profit recognition in the announcement, the net assets per share can be increased by 0.21 yuan according to the expected net profit recognized in the company announcement and the proportion recognized in 2006. The main positive role of the transfer is to use the funds to solve the problem of personnel placement that restricts the future development of the company, at the same time take stock of the idle factory area of Jianguo West Road, and prepare for the future channel construction.

The company's knitted underwear industry is still in a period of rapid growth, with an average annual growth rate of more than 20%. Brand and channel value to enhance the company's long-term competitiveness we continue to be optimistic about the company's knitted underwear industry: clothing consumption upgrading to promote China's knitted underwear industry is entering a new stage of brand and channel competition, data from the China National Business Information Center show The monthly sales of knitted underwear in large department stores across the country increased by 29.7% in February and 26.5% in March 2006, respectively, continuing to maintain rapid growth. As the "three shots" of the industry leader, after brand reengineering and channel optimization, there is still the expectation of sharing and exceeding the growth of the industry.

The future industrial integration of the company still needs to pay attention to: that is, we should invigorate non-operating assets, peel off non-knitted underwear business, speed up the promotion of brand channels to provide financial guarantee for the future development of the company, the company's main business integration is the core that we need to focus on tracking and attention: invigorate the non-operating assets of existing companies, peel off non-knitting business assets, and speed up the promotion of brands and channels. The company's value lies in making use of its own brand and market share of knitted underwear to obtain the high growth of the industry through the benign distribution of channels, enhance individual store sales revenue and enhance profitability in all channels, which is also the long-term value of the company. land transfer is only to provide the guarantee of the healthy development of the main business, not the value.

Maintain the forecasts of EPS0.10 and 0.22 yuan in 2006 and 2007, maintain the "cautious recommendation" rating we maintain the 15% and 17% growth of knitwear in 06 and 07, and the EPS profit forecasts of 0.10 yuan and 0.22 yuan in 2006 and 2007, taking into account the small increase in net assets after the transfer, we still maintain the investment rating of "cautious recommendation". We will continue to follow the new progress in the divestiture of the company's brand channels and non-main business assets.