From January to September 2009, the company realized operating income of 101 million yuan, down 20.4% from the same period last year; realized operating profit of 12.62 million yuan, up 5.1% from the same period last year; realized total profit of 13.72 million yuan, down 32.8% from the same period last year; realized net profit of 12.32 million yuan belonging to the owner of the parent company, down 39% from the same period last year; and basic earnings per share of 0.098 yuan.

From July to September 2009, the company realized operating income of 12.16 million yuan, down 58.5% from the same period last year; realized operating profit of-3.8 million yuan; realized total profit of-3.32 million yuan; realized net profit of-2.66 million yuan belonging to the owner of the parent company; and basic earnings per share of-0.021 yuan.

The first fireworks in China: Liuyang City has been awarded the honorary title of "hometown of fireworks in China". The company was originally called "Liuyang fireworks". It is the largest fireworks manufacturer in China, with obvious monopoly advantages in the industry. At the same time, the company is also the only listed fireworks company in China.

Accelerate the development of domestic sales business: since 2008, the export business of fireworks and firecrackers has been seriously affected by the international financial crisis, and the number of orders has declined. In order to deal with the crisis, the company has formulated the strategy of "stabilizing export and opening up domestic sales". With the help of the brand promotion effect brought about by the Beijing Olympic Games, the company has set up new sales companies in Henan, Shenyang and other places, with the intention of establishing and improving the sales network throughout the country.

The company lost a small amount in the third quarter due to reduced sales and high expenses: the company's operating income fell sharply in the third quarter due to reduced sales, down 57.1 percent from the previous quarter and 58.5 percent from the same period a year earlier. At the same time, due to the increase in costs and export transportation costs due to the development of the domestic market, the costs increased significantly during the period, increasing by 33.8% month-on-month and 81.1% over the same period last year, and the expense rate reached an all-time high of 76.2%.

Sadly and happily, the company's gross profit margin has made a new breakthrough. The company's comprehensive gross profit margin reached 44.3% in the third quarter, an increase of more than 8 percentage points compared with the same period last year. What reminds investors is that in the case of this high gross profit margin, as long as the sales situation at home and abroad improves, the company's performance will appear an inflection point.

Earnings forecast and investment rating: we expect the company's earnings per share from 2009 to 2010 to be 0.17,0.26 yuan respectively, corresponding to the dynamic price-to-earnings ratio of 126,81 times, taking into account the company's high valuation level, maintain its "neutral" rating.